This sums up much of my thinking - I hold a few and swing trade a few and even trade intraday sometimes ......

I think there is a lot of slack that management can cut out of the costs and would also anticipate sector consolidation ..... good value currently and have been holding their own in a falling market. Lot of US interest.

ains


Edited by Dominic White
(Filed: 08/02/2003)


Texting makes MmO2 sexy but it's also risky

More and more Britons are discovering the joys of textual intercourse. In the month of December, we fired off more than 50m mobile messages a day, and next Friday (that's Valentine's Day, folks, in case you'd forgotten) we'll send considerably more than that.



It emerged this week that the chief beneficiary of this craze is MmO2 . BT's former mobile phone division revealed that it gets a higher proportion of revenues from texting than any of the other three operators.

Revenue from messaging grew at its fastest rate ever in the last quarter, up 19pc, and data services as a proportion of MmO2 's revenue rose to 17.7pc from 15.6pc.

More good news was the rise in MmO2 's average revenues per customer. ARPUs, as nerdy analysts like to dub them, grew by 5pc to 243 in the UK and by 9pc in Germany to 212.

MmO2 now has 19.1m subscribers and in Britain it may be the smallest player, with 11.9m users, but it is growing faster than its rivals - testament to the success of its rebranding from BT Cellnet.

Only 114,000 of its 503,000 new UK subscribers were higher-spending contract customers, but MmO2 claims its pre-pay customers have started spending more than before.

Customer growth in Germany, which continues to be dominated by T-Mobile and Vodafone, is less impressive and the MmO2 share price ascribes little or no value to this part of the business.

That seems unfair, given the fact that the group has attracted higher-spending customers and has made a decent fist of turning the operation around. An eventual sale or merger is almost as inevitable as a disposal of the Dutch unit, which is losing customers.

MmO2 's larger rival Vodafone is trading on a free cashflow yield of 6pc, while at 49p this week, MmO2 's equivalent valuation remains negative. It might not have Vodafone's scale or profitability but there is room for upside. A risky buy.

in a way ...... you look at the most recent orders placed and tend to ignore those out of touch with current price action

L2? Any further progress? Still hoping the offer can be pushed to 53.5 within next one hour!

sector is plus 1% - market 1% and nas plus 2.5 points


Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (50.00%) 20 (37.72%) 1,971,343 52.59 - 53.46 3,254,733 (62.28%) 20 (50.00%)
5% (51.85%) 28 (46.34%) 4,328,413 52.35 - 53.65 5,011,352 (53.66%) 26 (48.15%)
10% (56.58%) 43 (54.81%) 6,283,182 52.04 - 53.69 5,180,872 (45.19%) 33 (43.42%)
15% (57.65%) 49 (57.09%) 6,930,514 51.72 - 53.71 5,208,572 (42.91%) 36 (42.35%)
50% (57.78%) 52 (60.19%) 7,886,582 51.04 - 53.72 5,216,876 (39.81%) 38 (42.22%)
100% (57.73%) 56 (59.06%) 7,931,702 50.98 - 54.33 5,497,568 (40.94%) 41 (42.27%)
all (57.14%) 56 (59.05%) 7,931,702 50.98 - 54.40 5,501,568 (40.95%) 42 (42.86%

By Friedel Rother

LONDON, April 14 (Reuters) - UK stocks were pushed up by a buoyant banking sector on Monday and gains for mobile operator mmO2 , while Wall Street added to the cheer with modest gains after a good start to the reporting season.

The FTSE 100 benchmark index was up 36.1 points, or one percent, at 3,844.2 by 1400 GMT. The market has rallied 17 percent over the past five weeks but is still four percent below where it started the year.

A flood of results are due out from both U.S. and UK companies this week. But despite encouraging news from financial services giant Citigroup (NYSE: C - news) , market observers remained wary.

"People are not going to be too concerned about the results themselves but more about the outlook for the rest of the year. I think it'll be quite cautious, quite tough," said Martin Cobb, investment manager at SVM Asset Management.

Mobile phone operator mmO2 was the biggest FTSE gainer. The shares rose 5.5 percent to trade around a five-month high after mmO2 sold its ailing Dutch unit for 25 million euros.

Merrill Lynch (NYSE: MER - news) upgraded the stock to "buy" and said the sale was good news for shareholders and the company.

Lloyds TSB (LSE: LLOY.L - news - msgs) was another top riser, up 3.6 percent on a report it is looking to sell its New Zealand banking unit, said to be worth up to $3.26 billion. Lloyds declined to comment on the weekend story in the Australian Financial Review.

Other banks also fared well, including Abbey National (LSE: ANL.L - news - msgs) and HBOS , both 2.7 percent better. The sector accounted for a third of the FTSE's overall gains.

Dealers said banking stocks were seen as an obvious play for investors betting on an improvement in the economy.

What's L2 showing now? It hit the price I wanted it to but I'd like it to close there now!

Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (51.85%) 14 (57.84%) 2,034,707 52.69 - 53.57 1,483,186 (42.16%) 13 (48.15%)
5% (47.06%) 16 (43.79%) 2,512,247 52.56 - 53.80 3,224,805 (56.21%) 18 (52.94%)
10% (48.08%) 25 (47.83%) 4,213,576 52.06 - 54.07 4,595,120 (52.17%) 27 (51.92%)
15% (51.67%) 31 (51.27%) 4,860,908 51.60 - 54.08 4,620,820 (48.73%) 29 (48.33%)
50% (52.31%) 34 (55.69%) 5,816,976 50.70 - 54.10 4,629,124 (44.31%) 31 (47.69%)
100% (52.78%) 38 (54.42%) 5,862,096 50.62 - 54.75 4,909,816 (45.58%) 34 (47.22%)
all (52.05%) 38 (54.40%) 5,862,096 50.62 - 54.83 4,913,816 (45.60%) 35 (47.95%

If only I could predict things as accurately as today! Nice bullish stance with close @53.25↑6.5%. Lets pray & hope that tommorrow see's this make further gains to the upside.

Volumes increased as the day went by - now 128 million or 50% up on average

disposal of 02 Netherlands leads Merrill Lynch to upgrade its recommendation to 'buy', dealers said.

The US broker, which formerly rated the shares a 'neutral', set a price target of 66 pence on the stock. Its move follows mmO2 announcing this morning that it is selling O2 Netherlands operation to Greenfield Capital Partners for 25m. "We believe that this is a good deal for mmO2," Merrill advised clients. "Today's announcement is further evidence that mmO2 management is working in shareholders' interests.

The transaction will improve the financial profile of the group and allow management to concentrate efforts on the UK and Germany," it said, Merrill sees the Dutch market as too competitive, with five competing operators and 75% penetration at the end of 2002. "We believe mmO2 had little chance of gaining critical mass given that nearly 70% of the market is controlled by KPN and Vodafone and subscriber growth has stalled." But today's deal "transforms" mmO2's financial profile, it argued. Net debt is now expected to peak at 0.9 bln stg, compared to the 1.15 bln Merrill had previously forecast.

Tomorrows press looks good


April 15, 2003

MmO2 launches shake-up with Dutch disposal
By Nic Hopkins TIMES



MMO2 yesterday began its long-awaited consolidation of European assets by selling its loss-making Dutch subsidiary for 25 million (17 million), bringing the mobile phone operator a 1.4 billion charge.
The writedown is in on top of the 2 billion that mmO2 has invested in the subsidiary over the past three years.

The sale fanned speculation about mmO2s future in Germany, where it owns the smallest of four mobile networks. MmO2 has previously held talks to merge its business with that of KPN, the Dutch owner of third-ranked E-Plus.

Peter Erskine, mmO2 chief executive, said the sale price of O2 Netherlands was the best price we got, given that the company had seen no way of making the business anything more than cash break-even.

The business was bought by Greenfield Capital Partners, a private equity firm, which is to reinstate the old Telfort name, and defer spending on third-generation mobile technology.

MmO2 had struggled to stoke buying interest in O2 Netherlands after Vodafone ended talks to acquire it in January. The Dutch division ranks fourth in its market, has just over a million customers and recorded operating losses of 49 million in the six months to September 30.

Analysts said the sale price was more than O2 Netherlands was worth, despite the one-off charge that mmO2 will take as a result of the sale.

MmO2s German arm, with a book value of 6 billion, has 4.6 million customers but is barely profitable. The German market leaders, Vodafone and Deutsche Telekoms T-Mobile, each have more than 20 million customers and collectively control 80 per cent of the market.

MmO2 said that the division needs to lift its market share from 8 per cent to 12 per cent to be sustainable, although analysts say that closer to 20 per cent is needed. The fastest way to hit the target in a mature market would be to merge with E-Plus, which has a 20 per cent market share.

Rodney Sherrington, an ABN Amro analyst, said: In the long run, a merger is going to happen. But there is no pressure to do a deal immediately and the management appear to have no intention to rush.

Tempus



MMO2s disposal of its Dutch subsidiary has come sooner than most investors would have dared to hope. Shareholders were told of the companys intention to sell last November, when mmO2 presented its latest set of half-year results. But given the unenviable position of the business, and the straitened financial circumstances of most trade buyers, few would have held their breath for a deal.
The emergence of Greenfield Capital Partners, a private equity group, has not only allowed mmO2 to sell more quickly than was hoped. Greenfield has also paid more for the business than many would have thought likely. A sum of 25 million (17 million) hardly sounds princely, but the fact that the business is loss-making meant that most analysts ascribed a negative net worth to it. As importantly, the sale removes a notable distraction for mmO2 managers, giving them more time to focus on the stronger operations in the UK, the Irish Republic and Germany.

However, the true significance of the deal comes not in the speed of its execution, or the financial terms or the management ramifications. The true significance is in the nature of the buyer. Private equity groups are not sentimental sorts. They want to see positive cashflow. If Greenfield has its chequebook out, it suggests that there is hard cash to be made in mobile telephony.

Of course, the cash-generative qualities of mobile phone operators may not be as positive as Greenfields interest in mmO2s Dutch business suggests. Private equity firms across Europe are flush with cash since investors in them have been so attracted by the rates of return delivered in the recent past. They may feel the cash burning a hole in their pockets and are taking on riskier ventures in order simply to get invested. In addition, Greenfield already owns the Dutch fixed-line telecoms formerly owned by Energis and may see some more amorphous strategic advantage in crunching the two together.

However, if Greenfield thinks there is a reasonable return to be made out of the relatively weak player that is O2 Netherlands, it will do nothing but encourage investors in stronger outfits. Private equity buyers affection for exit routes also means returns may come more quickly than is often assumed. It may also imbue mmO2s domestic business in the UK, and its German operations, with a potential value exceeding current reckoning. It may even heighten hopes that the whole of what was BT Cellnet will be bid for. Hold.

Durlatcher says charting wise the shares have lifted up through the top of a congestion band ie around the 50p level and are poised to break out in a serious way - need to get through the next barier at 55p ..... I still hold and hold the most I have held in recent times ..... hanging on for the ride



ains

Lehman Bros retains its overweight rating in mmO2 raising its price target to 73p from 70p following yesterday's sale of O2 Netherlands.

L2? Are any other firms currently updating forecasts & price targets after the disposal.

i expect they all are .... but don't have any more details at this time


Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (32.26%) 10 (29.70%) 1,057,687 53.72 - 54.46 2,504,102 (70.30%) 21 (67.74%)
5% (34.04%) 16 (36.93%) 2,506,449 53.32 - 54.68 4,280,050 (63.07%) 31 (65.96%)
10% (32.76%) 19 (40.64%) 3,258,622 53.07 - 54.77 4,758,673 (59.36%) 39 (67.24%)
15% (35.00%) 21 (41.52%) 3,378,522 52.99 - 54.77 4,758,673 (58.48%) 39 (65.00%)
50% (38.81%) 26 (49.63%) 4,696,162 51.21 - 54.78 4,766,977 (50.37%) 41 (61.19%)
100% (41.89%) 31 (49.64%) 4,749,282 51.09 - 54.89 4,817,669 (50.36%) 43 (58.11%)
all (40.79%) 31 (47.54%) 4,749,282 51.09 - 58.58 5,241,669 (52.46%) 45 (59.21%

Is L2 still quite weak? Cannot believe how far its fallen due to bad US figs. I really need the US to end +ve in a similar manner to yesterday & O2 closing near the 54.25 level today.

US is improving a little - L2 also



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (57.14%) 16 (56.56%) 1,813,784 53.08 - 53.97 1,393,175 (43.44%) 12 (42.86%)
5% (47.37%) 18 (49.26%) 2,155,622 52.99 - 54.17 2,220,214 (50.74%) 20 (52.63%)
10% (34.48%) 20 (40.20%) 2,576,177 52.79 - 54.54 3,832,537 (59.80%) 38 (65.52%)
15% (37.70%) 23 (43.46%) 2,946,077 52.21 - 54.54 3,832,537 (56.54%) 38 (62.30%)
50% (39.39%) 26 (50.47%) 3,913,717 50.70 - 54.55 3,840,841 (49.53%) 40 (60.61%)
100% (42.47%) 31 (50.48%) 3,966,837 50.56 - 54.69 3,891,533 (49.52%) 42 (57.53%)
all (40.79%) 31 (47.89%) 3,966,837 50.56 - 59.19 4,315,833 (52.11%) 45 (59.21%)

L2 must be weak right? Despite nice move up this am now ignoring mkt advances ↓0.5%.

some profit taking today I suspect - still holding mine



Buy orders Sell orders
Num(%) Num Vol(%) Vol VWAP Vol Vol(%) Num Num(%)
1% (44.44%) 16 (47.87%) 1,861,517 53.49 - 54.28 2,027,105 (52.13%) 20 (55.56%)
5% (41.07%) 23 (46.43%) 2,919,616 53.32 - 54.51 3,369,228 (53.57%) 33 (58.93%)
10% (37.14%) 26 (50.42%) 3,569,349 53.14 - 54.57 3,510,228 (49.58%) 44 (62.86%)
15% (35.53%) 27 (45.38%) 3,619,349 53.07 - 55.04 4,356,357 (54.62%) 49 (64.47%)
50% (37.04%) 30 (52.04%) 4,735,658 51.88 - 55.05 4,364,661 (47.96%) 51 (62.96%)
100% (39.08%) 34 (51.99%) 4,780,778 51.77 - 55.16 4,415,353 (48.01%) 53 (60.92%)
all (38.20%) 34 (51.96%) 4,780,778 51.77 - 55.25 4,419,653 (48.04%) 55 (61.80%

Goldman Sachs initiates coverage of Intercontinental Hotels with an underperform rating and of Mitchell & Butlers with an in-line rating.

The broker has an in-line rating for Invensys buts cuts estimates and has an outperform rating for mmO2 (OOM).