14th Nov 2006 T&G Comment in Post 3 : Link Back to posts Click Here



Group Web Site : http://www.xko.co.uk/

Powerdebt Web Site : http://www.powerdebt.co.uk/home.php

UBM Web Site : http://www.utilitybilling.co.uk/

Shares in Issue : 42.68m

Following the sale of the Software Services side, which on a pro-forma basis reduces debt to basically nothing, XKO is now all about Revenue Assurance. This should be an area of high growth, and XKO should soon reflect this in terms of performance put in so far and prospects to come, by a re-rating.

What is it ? The Revenue Assurance division specialises in complex Revenue Assurance and debt management for major utilities. There are two units in this Division, UBM ( current customers include giants like npower, Centrica etc..) and then Powerdebt (which is a specialist Revenue Assurance and Debt Management business based in Solihull.

So XKO is now in basic terms debt free, putting in decent earnings, with good prospects going forward, UK based and with a nice dividend to boot.

Add on to that some earnings enhancing acquisitions in the Revenue Assurance side, and a strong growth high margin business is building nicely.

Oct 2006

Revenue Assurance, Fraud, Credit and Cost Management Solutions Market to Reach $562 Million by 2010.................................................


http://www.xchangemag.com/hotnews/6ah30162652.html

********************************

Sept 2006

This post from III makes interesting reading, and shows the reduction in EPS to present forecasts now the software division is sold (but as we know that now makes XKO debt free pro forma..........)
If the Software side was only delivering single digit growth makes sense to get rid of it for some cash, and then put this into higher growth higher margin revenue assurance and grow that side.


12-09-06 Re: Luke Heron tips XKO - Text kurafu-san 3

Here is the text - cant copy the graph...

The software sector is hardly in vogue at the moment, though there is a price for everything and that price has been reached with AIM listed XKO. This company is arguably the leading software and services provider to the utilities markets and the building supply chain. Its present position has been forged via a gradual refining process which has seen the current management team offload parts of the old business, whilst adding to the mainstay with key acquisitions.

Following the disposal of the group's Government and Financial Services Division in March last year, coupled with the acquisition of UBM in August 2005, XKO now comprises two divisions - Revenue Assurance and Software & Services. The group has also made a further addition to the Revenue

The Revenue Assurance division specialises in complex Revenue Assurance and debt management for major utilities. This involves the identification, negotiation, receipt and repayment of unbilled or over billed gas, electricity or water on behalf of utility customers. It is this division that has been hailed as the New Jewelof XKO. To illustrate this view, the division has more than delivered on expectations, to the extent that the full 8.5 million pounds earn out, related to FY 2006 EBIT performance, was triggered.

Meanwhile, whilst the Software & services side is only delivering a low single digit growth performance, it is a robust performance nonetheless as margins improved from 12.2% to 16.1% in the last reporting period. This division will one day be sold. That might be tomorrow, it might be in three years time - there is no rush. The management will sit and wait until the right deal emerges.

The bottom line is a group that should comfortably generate pre-tax profits exceeding 8 million pounds for the current year, which on a full tax charge will equate to earnings of 12.75p per share. This should fund a dividend payout of 1.3p. For the following year, pre tax profits should be up above 10 million pounds, equating to earnings of 15.7p per share, putting the stock on a forward earnings multiple of 6.2. As we approach the traditionally more active quarter of the year in terms of smaller company interest, coupled with the growing realisation that this stock is cheap - I expect a re-rating to occur. Whatever way we look at it, the stock is cheap. At 97.5p, there is at least 50% upside over the next 12 months or so. BUY.

Key Data

EPIC: XKO
Mkt: AIM
Spread: 95 - 100p

*********************************

June 2006

Here is the earlier write up over the summer by GCI :

http://www.growthcompany.co.uk

XKO - BUY

Companies: XKO 21/06/2006

Under straight-talking chief executive Simon Beart, XKO has repositioned itself as a revenue assurance provider through acquisition and beaten forecasts for the year to March. We have sold and reinvested successfully, shown a good bit of footwork, and had a hell of a good year, reflected Beart.
After selling its Government and Financial Services arm, XKO reinvested the proceeds via the August acquisition of UBM, followed by the smaller acquisition of Powerdebt in December, deals which built scale in the fast-growing revenue assurance sector, where XKO is now generating superior returns. Revenue assurance, which entails the identification of unbilled revenues as well as the collection of previously invoiced debt, provides the real excitement for investors, with UBM (whose core customers are the major UK energy utilities) having already won a substantial contract with an oil major since acquisition and Beart confident of taking further slices of the gas and electricity markets this year.
XKO also retains a software division supplying IT services and applications to the building supply chain and specialist distributors, where encouraging organic profits growth of 13% was struck last year.
Despite recent corporate machinations, XKOs adjusted pre-tax profits sparked up from 3.8m to 5.4m last year a 42% leap on revenues lifted 19% to 27.6m. Investors were also treated to a 9% rise in dividends to 1.2p on the back of strong cash flow.
XKO trades on a historic p/e of 8 times, with the market yet to grasp the significance of the UBM deal, which has dramatically improved the quality of earnings as well as prospects. We think XKO looks great value. Buy.

James Crux
Market cap: 44.2m
PE Forecast: n/a
Share price: 106.5p

edcrane - 14 Nov'06 - 09:50 - 41 of 46 (premium)

Teather & GReenwood comment following results .... raising forecats and BUY recommendation

When Will the Market Recognise the Value Here?

Revenue Assurance Services Plc, formerly XKO Group, has reported interim results this morning, its first since the disposal of the ERP software business and therefore completion of its strategic transformation into a focused provider of revenue assurance services, currently to the utility sector. H1 results, stripping out the contribution from the disposed software business, delivered revenue of 7.93m, adjusted PBT of 2.82m and diluted EPS, on the same basis, of 4.73p. An interim dividend of 0.4p was awarded representing a 52% increase over the previous period reflecting the strength of underlying growth and cash generation.

On the back of this, we have raised our FY 2007 revenue target from 14.6m to 16m, and increased our clean PBT forecast from 5.25m to 6.25m. Our EPS estimate rises c11% to 9.8p, and we have moved our total dividend forecast up from 1.3p to 1.8p. We have been less aggressive with the revisions we have made to our FY 2008 and FY 2009 forecasts, simply as acknowledgement both of the fact that timing of unbilled error discovery is, by its nature, difficult to predict, and to reflect the fact that there was already the assumption of new contract wins underpinning our previous numbers. Our FY 2008E EPS figure moves up to 11.5p, from 11.2p, while our FY 2009E number rises to 13.8p, from 13.6p.

Looking ahead, there is much to attract the investor to this stock. The new entity is now a clearly focused business, operating within a premium growth market with both organic and acquisition-related opportunities available to sustain and, potentially, enhance this growth profile. The balance sheet has significantly strengthened, the business model is highly cash-generative (cash conversion in H1 was c103%), while any concerns over the re-tendering of contracts have been overblown. A calendar 2007E PE of 8.5x also looks outstanding value against a support services sector where multiples in the mid to high teens are common. We are retaining our 140p target which represents a multiple of only c12.5x calendarised 2007 earnings and firmly reiterate our Buy recommendation.

4

5

Nice start to life as RAS

L2 4 v 2 @98/101

L2 on the up, now 3 v 1 @99/101

Nice 335K protected buy from earlier been posted.

L2 now 2 v 1 @101/104

Ticking up nicely. Should be on to test 125p soon after those results and outlook. Its cheap compared to peers. 15 times current year pr EPS would be over 140p as well.

L2 nice and blue, now 2 v 1 @104/106

Solid day, more to come, under 130p is cheap IMO.

From a post on AFN :

zho - 16 Nov'06 - 16:20 - 38 of 38


http://www.growthcompany.co.uk/recommendations/30077/revenue-assurance-services.thtml

Companies: XKO
14/11/2006

November marks the dawn of a new era for the company formerly known as XKO Group, with a new name, a new sector and a new focus 'revenue assurance'.

It has appropriately been re-named Revenue Assurance Services (RAS), having sold the last part of its erstwhile divisions for 15m in October making for a gross 28.5m for the sum of the old business. This allows chief executive Simon Beart and his management to concentrate on the revenue assurance businesses acquired last year.

The group provides three services to its utility company customers: consultancy, where experienced consultants and proprietary software identify and secure un-billed debts; collections, which is telephone-based debt collection of existing debt; and metering services, where a meter-reader is sent to business premises to physically check gas meters. RAS has around 30% of the gas utility market at the moment, including customers Shell, eOn and Centrica but at three times the size, the electricity market is a significant target.

Utilities face ever more pressure to keep their costs down and RAS offers a great outsourcing option, with no clear competition yet. Although there is some opposition to their adoption from the utilities in-house collection departments (and contracts can therefore take around two years to win), Beart stresses that his consultants levels of success are incomparable and he is confident of adding contracts in both gas and electricity. He says the balance sheet is under-geared and is pondering acquisitions.

The business is achieving 40% margins, taking 3.3m cash from 7.9m sales in the half year to September, with profits before tax of 2.1m. House broker Bridgewell has upgraded year-end numbers to sales of 16m, profits of 5.66m and earnings of 9p per share.

Growth Company Investor recommended buying the shares at 106.5p in June but, with earnings upgraded to provide a prospective p/e ratio just over 11, its worth adding to your holding.

RAS is the main buy recommendation on IfG this weekend its said. I do not have access myself, anyone with can they advise if it is.

http://www.investing-for-growth.com/

This was the summary on Friday from the I.C. after the results ( http://www.investorschronicle.co.uk/ ) :

"Its name may be different, but neither the story, share price, nor forward PE ratio have changed much since our last buy advice, which we reiterate. Buy."

2 MM's blue so far, now 2 v 1 on L2 so we might be in for another steady blue week, as people realise what good value RAS is below 130p given the sector and growth and the fundies behind RAS now.

Nice day, apart from the fundamentals behind this deserving a higher price, it would appear from small talk a deal with Centrica is near to happening. News on that might be a spark to a quicker rerating.

IMO, DYOR !!

L2 up and now 3 v 1 @113/115

are u talking to yourself papal?

Yep :)

On todays free email from GCI ( http://www.growthcompany.co.uk ):

November marks the dawn of a new era for the company formerly known as XKO Group, with a new name, a new sector and a new focus on 'revenue assurance'. It has appropriately been re-named Revenue Assurance Services (RAS), having sold the last part of its erstwhile divisions for 15 million in October - making for a gross 28.5 million for the sum of the old business. This allows chief executive Simon Beart to concentrate on the revenue assurance businesses acquired last year.
The group provides three services to its utility company customers: consultancy, where experienced consultants and proprietary software identify and secure un-billed debts; collections, which is telephone-based debt collection of existing debt; and metering services, where a meter-reader is sent to business premises to physically check gas meters. RAS has around 30 per cent of the gas utility market at the moment, including customers Shell, eOn and Centrica - but at three times the size, the electricity market is a significant target.

Utilities face ever more pressure to keep their costs down and RAS offers a great outsourcing option, with no clear competition - yet. Although there is some opposition to their adoption from the utilities' in-house collection departments (and contracts can therefore take around two years to win), Beart stresses that his consultants' levels of success are incomparable and he is confident of adding contracts in both gas and electricity. He says the balance sheet 'is under-geared' and is pondering acquisitions.

The business is achieving 40 per cent margins, taking 3.3 million cash from 7.9 million sales in the half year to September, with profits before tax of 2.1 million. House broker Bridgewell has upgraded year-end numbers to sales of 16 million, profits of 5.66 million and earnings of 9p per share.

Growth Company Investor recommended buying the shares at 106.5p in June but, with earnings upgraded to provide a prospective p/e ratio just over 11, it's worth adding to your holding.

Market cap: 48.44 million Ticker: RAS Share price: 113.5p

No you are not talking to yourself.
I am following this. It climbed 6p today to 119.
Has it run out of steam?
FDP just finished a climb.

News is due on contract renewals.

I am hoping for 125p to 130p as a new support level once it goes through it.

Up we go again :)

Good news today :)

Creeping upwards....

Any idea why the riser P..

Guesses are news on Centrica deal, or some other deal in the offing.

thanks mate.

Nice update today :)

Nice news today :)

Lovely set of results and a contract win too :)

GCI had a "Strong Buy" rating yesterday.......and looks like more buyers in today as well.

Somethings happening perhaps........

From Luke Heron, posted on http://www.sharecrazy.com BB ;


Luke Heron Reged: 27/06/07
Posts: 7
Re: Revenue Assurance - RAS [Re: rebecca]
#394218 - 04/07/07 10:56 PM Edit Reply Quote

I tipped this one at 88.5p in August last year. There is still a lot further to go - I have a target price of 183p. The numbers out from the company a couple of weeks ago were ahead of my forecasts. Based on my conservative forecasts for the current year, I think we should attach a 15 times multiple, which is perfectly fair for a management delivering such solid growth. 12.2p in earnings for the year to 31st March 2008 suggests a target price of 183p, which I expect will be reached before the calendar year is out. The fact is, that earnings for next year could be comfortably up to 15p, which suggests a target price of 225p. Whatever way I look at it, the shares look strong.

Moving well again today :)

Yet another possible takeover :) Yummy

Revenue Assurance Statement re Possible Offer

RNS Number:1616A
Revenue Assurance Services PLC
12 July 2007

Revenue Assurance Services plc

Talks announcement

12 July 2007

The board (the "Board") of Revenue Assurance Services plc (the "Company") notes the recent share price movement and confirms it is in preliminary talks which may or may not lead to an offer being made for the Company.

There can be no certainty that an offer will be made for the Company or the terms on which such an offer may be made.

Further announcements will be made as appropriate.

Guess you were right re the deal in the offing..