Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

A winning second half from WIN

I see that WIN the wireless data services provider had a good second half and FY06 results are well ahead of its broker’s expectations, with the company generating normalised profit before tax of £2.3m and EPS of 18p, compared with forecasts of £1.9m PBT and EPS of 14p.

WIN is now debt free, with a healthy £3.8m net cash position. At the Interims the management said it hoped to announce a maiden dividend this year and intends to put a 2p dividend to the AGM this year. Not much of a yield but at least a token and no doubt they have better use for all the cash.

The new CEO has instigated a wide-ranging review which has seen headcount slashed by 20% and a sharp re-focusing of the operations.

The house broker has lifting their FY07 forecasts to a normalised Profit before tax (excluding goodwill amortisation and share-based payments) of £2.75m and EPS of 20p. That leaves the company on a multiple of just under 10x for the year to December ’07.

The bad press surrounding premium rate phone lines obviously doesn’t help although most of WIN’s business in this area is with the BBC which has been implicated in fewer problems and has publicly said it does not intend to suspend its PRS operations as ITV and C5 have done.

Cash and improving outlook notwithstanding it still looks a bit risky for my IHT portfolio.


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