.

LING i agree with you,

It was not a well written ts,

Maybee he knew what he was doing when he sold some to fund his house purchase back in may i think,

Will be interesting to see if they top up now.

Having bought into EVS at 3p and sold out at 6.9p a while ago, I have to say they now look extremely good value.

Though following their trading statement, I have to wonder if they are in net profit at all for the current financial year. With a 75% increase in turnover and a 100% increase in gross profit their margins have improved. But the question is, what are their admin and other expenses for this year? The prelims should reveal all.

I will be jumping back in at some point, but it looks like the bears have hold of it for now.

The problem with the TS is that on the one hand EVS is talking about revenue increasing by over 75%. On the other hand they say that a major part of their core business (prepaid calling cards) "continues to be a volatile sector" and that they "Our strategy is not to grow this business further".

One is saying that we have had a 'good year' and the other is saying that it can't last and we had better do something else pretty quick or we are going to be in trouble. CCR looks a desperate move to me. I am sure it will profitable fairly soon, but I don't think it will generate enough profit to replace the loss in profit in the core business. I don't think that EVS thinks so either which is why they are talking of acquisitions.

Don't forget that share prices usually fall for a company making an acquistion. EVS is a good example. When they bought part of Severn their share price was flat for a while and then fell. When they bought the remaining part of the company their shares halved in price. The market doesn't like the unknown and a takeover can never be evaluated until at least the next full set of results or later if the results are too close.

If PBT is in line with market expectations as they say in their TS, then we are looking at a PE of 8 for the current year. That moves to a PE of 4 next year if they can continue to perform.

tallisi,what does that actually mean?
Would appreciate your knowledge

Capetown, it is a measure of profitability of the company relative to it's price.

For example, if you had a company that was worth 10m and it was making 10m profit after tax every year, then you would have a price/earnings ratio of 1 and be onto a good thing! If you had a company that was worth 10m and was only making 100,000 per year, then you would have a PE ratio of 100, which is a worse return than you could get on most bank accounts. The second company would only be worth owning if you expected some signigicant profit increases in coming years.

EVS shares are currently at 2.83p each and the expected earnings for the current year are 0.32p per share. So the current year's PE is 2.83/0.32 = 8.8. That is better than most bank accounts, and since we have fairly solid expections for furture growth, it is a pretty good buy. But the SP may well fall further yet!

Talisiii
Thanks for that,
Still learning!,
See a one mill buy just gone through,and sales equal to buys so far today,i am going to just hold these and hope that they will make a comeback,
Thx again

I am not sure it was a buy. Look at the time stamp on the trade. It was made more then an hour earlier than it was reported. The trade coincided with the drop in price.

PTH - It is not Mr Ling but Dr Ling! Not that it matters.

One possibility that crosses my mind is that the SP has been deliberately manipulated so that someone can buy into EVS at the right price. The TS was so badly worded that I cannot believe it wasn't deliberate. The resultant SP collapse was very predictable and presented an excellent buying opportunity.

Dr LING,capetown here,do you really think so?,as i am definateley a novice and i could have wordrd a better ts than the one we got!

I thought this board was well respected at evs,

Good to see as many buys as sells today,but what has happened here is enough to stop me trading forever,

In laymans terms what do you think the outcome will be when we get the figures?,and would you not think the directors would buy some at this price to reinforce confidence?

Capetown - I'm afraid that when money is involved there are no depths that some folk won't stoop to in order to get some. The TS was so dreadful that I can only think it was deliberate. Any 'advisor' looking at it must have raised doubts!

Given the management the future must be uncertain but the company is fairly soundly based and could do well. EVS should produce another RNS to rectify their appalling TS as soon as they can and then the situation may become a little more clear.

Dr Ling

If it doesn't matter why mention it?

By the way, many thanks for the advice, always much appreciated.

Can't say I am surprised this has tanked, did advise against buying some months ago. Andy S, we made a good decision!!

pth

I find it amusing that people are quoting PE ratios when in fact a large dilution is very likely which will dilute EPS and change all forward PER.

A lot of top analysts are saying do not wait - SELL - I wonder why ?

...and I wonder why you want everyone to sell, ii. Which analysts, and where are they saying it? Please paste to the bb, so we can all read them! (I won't hold my breath).

Well said, Taquilla. I'm afraid EVS are going to have to do something very quickly, however, if they are to restore any market confidence in their company. The TS last week was an absolute disaster and I just cannot imagine how they managed to publish such a damming statement. Given that they did what chance do they have of putting it right?

I hope EVS take note of what happened to TTL - they need to calm any market fears very quickly indeed.

unionhall - 29 Jul'05 - 15:38 - 14754 of 14880 edit


Folks,

I've just had a good discussion with Kevin McGovern.

First of all the company are surprised and disappointed by the market reaction to the Statement. It had been reviewed by the usual advisors etc and noone had foreseen the reaction.

Financials first -

He is very clear on the top line, gross margin has some wiggle room in case of the audit throwing up adjustments and the bottom line PBT which they refer to as market expectation is the 1.1m and again they are conservative to ensure they meet this target.

The significant investment spoken of is not capitalised but expensed in getting to the 1.1m PBT target.

Working Capital issue is arising simply from the business growth and the differing terms to debtors and creditors.

It will be dealt with if possible in line with any acquisition in the six months to December.

They are acutely aware of shareholder value and are looking at the various funding options.


They are not planning growing the Wholesale element of their business further but this is based on current runrates (my estimate approx 22-24m pa). They believe they have achieved the level at which they can retain adequate margins etc.

Acquisitions if they happen will be on the Retail side and they are talking to a number of targets at the moment as the RNS mentions.

The VOIP confusion is around inward vs outward traffic. They have appropriate VOIP infrastructure for outgoing international calls but are building for a cost-effective full UK coverage to BT etc when BT's 21st Century Network comes on line. (Cardiff will be first city in March 2006 with full roll-out by 2008)

To help investors understand this he is hoping to put some slides on the website.

The company are happy with the CCR roll-out but being a conservative he mentioned it is still in its infancy so impossible to trend at this stage.

UNIONHALL,
Thanks for the post,
You should be employed by them,
Dont you think that the T S was shocking?,if they care about their investors then i believe a better ts could have been releases,i do not understand why they are suprised at the markets reaction,are you?,

I will hold my stock in this company but the minute it reaches the price i paid if ever i am out of here as i have no faith in this management after the TS,

Your post has installed some confidence for me,but it is sad that i have taken comfort from a post like your as opposed to one from the board,the people i trusted with my money,i know its always a risk and i only blame myself for investing so heavilly into evs,what is your view on the fact that 7million shares were purchased on friday?,
MANY THANKS

Capetown - You have my sympathy. I am nursing some heavy losses in EVS and I am pretty fed up with the nerds who released the TS last week. Could they really have thought that it wouldn't upset the market?

If you read what happened to TTL it is quite frightening. They were issuing very upbeat statements right up to the point where they went bust. I gather there was some problem with money inside the company which didn't help.

I am hoping that EVS will retrieve the situation even tomorrow by issuing another RNS. Quite why it took them so long to release the TS I really don't know. It could have been released weeks ago. Something would seem to be happening but I have no idea what it is.

Dr Ling,
I agree with you,
If they are suprised at how the market has reacted,
Lets see some director buying?
Lets have an rns?
Its not rocket science.