http://www.rcg.tv

Read the Investec update in the link above, its their forecast, they are the new broker, and its their update after results.............and they consult with their client, RCG.

RCG has an issue, in that earnings are not visible going forward.

The results just gone reported on a "weighted number of shares" and the 2007 figures must report on the full amount of shares in issue (which dilutes earnings), then there is tax and all sorts of things. This will be a period of consolidation on RCG, and it often happens, people follow the growth story, but forget all the other factors.

papel thanks for the investec link, i agree on the tax rate increasing to 7% but investec predictions are far to conservative (and they admit this in their report)along with what was written in the rcg tip in the shares mag about 5 weeks ago. Ok we wont see another 300% increase this year but at least 100% is easily possible with a USA deal.

Managed to get an add in sub 1.40 as hoped.

Broker notes on RCG have consistently been understated, gives them a lot of room to beat market estimates and surprise on the up side. Not a bad thing in my opinion.

capa

well done--I knew I should wait a bit longer to get back in! long term we're in a winner though so a few pence shouldn't matter---I hope.

I totally disagree with investec estimations on sales they are way to low! Rcg only down 2p today and look at the rest of the market.

check out rcg website won some awards...

argos, tax increases from 1.1% last year to 7% this year. Shares in issue goes up from 176m to 195m. This means that RCG must put in 22.5% extra profit before tax before making just the same earnings.

Last year was a record year, heavily bumped up by the launch and take up of the FX notebook, thats not going to be the case this year. Its the trouble with extreme record years, they are a hard act to follow, and this is one problem with RCG, there is very little visibility of future earnings.

Personally I feel Investec is a little conservative, and I see RCG putting in about the same earnings again.......which equates to a zero growth rate, and therefore a PER of about times 8.5.

Very worth a read, Colins visit report on the meeting with RCG :

http://boards.fool.co.uk/Message.asp?mid=10452762

The new CS note is out is seems, with a downgrade from buy to hold.

As soon as I get to see it, and the forecast figures, I'll let you know what they are, but would expect them to be around the levels of the Investec note.

papalPower thanks for the update. I am in the proccess of compairing the ints for 06 and full results. At interim 06 RCg turned over 22.6m (4.8m 2005) which exceeding full revenues in the whole of 2005 by 46%. The best case for investors is this to happen again meaning turnover for 1st half 07 =61.8million (06turnover)*1.46= 90million. When ints for 07 are out we shall see trading is strong though.

argos, a strong H1 07 is being suggested, and I would expect H1 07 to represent half of FY 06.

I would not compare like for like H1 06 and H1 07, as H1 06 was weak (in terms of the FY 06).

RCG are going into china this year, so I cant see earnings being the same. Looking at trade receiveables of 18.522 million and deposits, prepayments and other receivables of 7.6million things look up for Rcg.

PapalPower - 15 Mar 2007 01:57 - 124 of 129

argos, tax increases from 1.1% last year to 7% this year. Shares in issue goes up from 176m to 195m. This means that RCG must put in 22.5% extra profit before tax before making just the same earnings.

Quite right to take account of the tax rise and the dilution but the actual answer is 17.8% not 25% (98.9/93 X 195/176). Don't forget the 7% tax is Investec's worst case scenario - Dr Chu sems to expect a lower rate. Although I wouldn't be surprised to see another 25m shares issued for an acquisition or w/capital needs, which would balance out a lower tax charge.

How can you expect 2007H1 to represent half of 2006. It's got to be at least 2006H2 which was 6.6p v. 4.2p for 2006H1. I can quite imagine net profits rising 15% per half from 2006H2 which takes us to EPS for 2007 on above basis of about 13.8p still 20% ahead of 2006. PE of about 10 an PEG of about 0.5, paying a growing dividend - with much more upside than downside in prospect. Find me another share that fits these criteria so well.

No, you got me wrong there, I said you should compare 07 H1 with 06 H2, as you say.

H1 07 will be good, but I am suspecting a drop off in H2 07 (this due to the FX effect in H2 06, which will rollover into H1 07).

I see H1 07 results being good, but the FY will dissapoint and thats where the correction comes in, which is why Investec and CS are both forecasting lower EPS in 07 than was achieved in 06.......however I think it will not be lower, but will be around the same level (taking into account tax, shares in issue and currency changes).

Each to his own PP. I think same EPS for 2007 as for 2006 will be very disappointing and unlikely imho.

I think the investec note was aimed to stir things up a bit. My predictions are H1 07 profits 16.1million and half 2 07 profits of 23.9million (with China coming into play) includes at 7% tax rate with H1 turnover increasing 20% from 2nd half 06 and half 2 07 turnover increasing 30% from my half 1 07. Total of 40million profit, doubling EPS rate to 20p if no furthers shares are issued. Probably way OTT.
Remember it takes rcg up to 90 days to get the cash for deals done. China only accouted for 3.4% of revenue in 06, I am hopeing this should be 10% by ints and 20% by this time next year shifting away for south east asia+better middle east contribution.

updates on RCG website at the moment include order for BIOmirage contract of US$2.5 million and acceleration of expansion into China!

LONDON (AFX) - RC Group (Holdings) Limited said chairman and CEO Dr Raymond Chu has today purchased 100,000 ordinary shares in the copany at 132.5 pence each and now holds 18,170,000 ordinary shares representing 7.8 pct.

Institutional Buying yesterday from

MERRILL LYNCH INTERNATIONAL INVESTMENT FUNDS - 3.1%

&

BLACKROCK Inc - 5%

Great to see institutional buying that was proabably investec plan to remove small shareholders due to their 48 page negative note! More aqus on the way I expect due to share placing