http://www.rcg.tv

Interesting points PP - thanks.

Since I've been bearish on RCG of late (and correctly down from the 150's), here is a post I put on ADVFN, as the results near.


"""It will be interesting to see if the "half on half" reduction in growth is continuing.

Lets not forget, this is not a business with loads of recurring revenues, its a business which needs to spend buckets on R&D, and have an ever new list of products to sell. Comparing annual figures is very misleading, imv, and you can only, in a case of a company like this, compare consecutive half years, and not annual half years, or Year on Year figures.........the business is about continual change and evolution of the product range, and must be judged on "Half Year on consecutive Half Year" figures.

EG, H2 07 compare to H1 08 and then H1 08 compareto H2 08.

Do not IMV compare H1 07 to H1 08, or FY 07 to FY 08, that can mislead. There is no mistake when you compare the consecutive half years.

The interest therefore ahead of us all is what are the H2 08 figures like on their own.

As a reminder the growth had stopped last half year, (the comparison done at the exchange rates at that time, not updated to todays rates) :


Turnover

2006 H2 = M 39.2

2007 H1 = M 38.6

Profit after Tax

2006 H2 = M 13.4

2007 H1 = M 12.1


Obviously the "spin" merchants were pumping the growth on H1 06 - but thats not really relative in the case of a company like RCG. So, the interest with the RCG results (apart from cash levels and cash spend) will be not the FY06 figures compared to FY 07 (as H1 06 was crap in relative terms), but what is H2 07 like compared to H1 07. Thats the key, and hopefully for RCG holders they will at least show some growth again, and not declines in both turnover and PBT."""

PP As a shareholder the important stats are earnings per share and dividend per share on a annualised basis not half yearly. Lets hope to see a significant increase in final dividend as they dion't seem inclined to pay an interim.

As results near, need to keep an eye on certain metrics with RCG, we have already seen for H2 06 compared to H1 07 a fall in revenue and profit after tax.

Just some rough calcs so if any mistakes please accept my apologies......

Will have to quickly work out what the H2 07 split is from the Preliminary figures.

RCG is "allegedly" very weighted to H2, and so there has to be growth over H1. Any failing to see a substantial positive difference over H1 would be quite bad imv, and I seriously cannot see them not putting in another half of negative growth (as was from H2 06 to H1 07), there has to be growth this time around, but the question is, is it big ?

If their talk of substantial outperformance is correct, you'd expect them to do at over 100M turnover in H2 alone, and 19.1M Profit After Tax for H2 alone. That would be considered line with the gains acheived in 2006 H1 to H2........lets see if they do "in line with 2006" come prelims, or are "significantly ahead".



Turnover

2006 H2 ...........................M 39.2 Goes DOWN to

2007 H1............................M 38.6

2007 H2............................M ?????? (Target 100M)


Profit after Tax

2006 H2............................M 13.4 Goes DOWN to

2007 H1............................M 12.1

2007 H2............................M ?????? (Target 19.1M)


After their fund raising lets see cash in bank too :

2007 H1............................M 56.8

2007 H2............................M ??????




(Reference H1 06 to H2 06 saw growth of revenue by a factor of 2.8, and growth in Profit After Tax by a factor of 1.58. These have been factored in above, to see if they can match 2006 H1 to H2 ratios).

The Profit After Tax figures are skewed, this is due to taxation in various countries, which means that interims look weird, but prelims tell the true story as then all tax from all regions for the whole period is taken into account (Its why you'll see big revenue gains from prelims to interim, but smaller After Tax Profit gains).

Should they perform "in line with 2006 HY to FY gains" you should see 12.1M + 19.1M = FY Profit After Tax of 31.2M, equating to EPS of 13.4p.

With such performance, you'd expect, so many say, cash in the bank to be going upwards - so lets see if it rises, or falls come full year end reporting.

PP as I said earlier all that matters for shareholders is a significant increase in earnings per share and a substantial increase in dividend. If these don't materalise then the shares should be dumped.

Tipped by SCSW it seems, according to posts on AFN. That explains to me the rise in price over the last week does it not.

Funny how each of the buy tips for RCG is preceeded by some buying and a rise in the SP. The SP chart says it all really.....up it goes...must be a buy tip coming up...........

Those that "just happened to purchase" in ahead of the SCSW buy tip, will no doubt be the ones dumping out just before or just after the results, provided the price spikes up enough to make them a trading profit.

Good results... market drop, will never fully understand this market, slight drop in dividend, but acquisitions on the way...!

Shareholders expect to share in the profits ,reduction in dividend very negative move suggests cash problems. Overhang of shares following death of Madam Wang not resolved. Further acquisitions may place more stress on cash resources in the short term.imho.

Euhhh, you could be right halifax, Kyoto says the market cap is 190 million, with the profits made and one or two possible acquisitions to be made on the agenda, this could still be undervalued, this does seem to be a good company though, those shareholders like myself will need a little more patience I presume !

Further to my previous post, I hope that there will not be a fund raising exercise coming !

Might prove difficult to raise funds in this market as their last placing was if I remember correctly done at a much higher level than the present sp.

Well, didn't make much on that short, the question remains now, with tax year end selling and a boring bad summer ahead, will it just trickle down now given no major news ahead ?

Cash, I look at it this way, they start 2007 with 20.8m in the bank.

They raised by new shares 43.4m


After all was said and done, with their business for the year, they ended up with 41.8m in the bank.

So cash at start, + business operation, + cash from shares = just +23.4m

And new shares = 43.4m, so did they spend lots of cash.........looks like it.

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

Tax = Look at the tax paid (bugger all), lots of tax avoidance gone on there to bump up the EPS figure, imagine if these results were subject to 25% tax rates, EPS would be near 25% lower. They managed to get away with tax this year, will they next ? and what about 2009, and 2010 ?

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

Can't be bothered to go into too much detail, most peeved actually we did not get any bigger spike to short - but there you go, this is life.

Well, the company thinks cash is an issue and CUTS the dividend to preserve cash, PI's think its no problem, the broker is spouting about increases in cash ahead, even when they know that acquisitons are very likely.

Does tend to say lots of people have not got a clue whats going on, so who is right and who is wrong ? I would guess the company are correct and thats why the cut the dividend, for if they do not know what their plans are going forward, well, God help RCG shareholders.

Might all be part of the game imo, take this action now, prepare shareholders for "tight cash" - spend lots on acquisitions, and then make a cash call (as I have been saying for a long time, and now "marben100" seems to think might happen too).

Anyone considered they might "spend through acquisition" their way to being tight on cash as a potential scenario, and then ask the HK buddies for some more money, for some cheap shares...... ;)

I'd have a good guess as my own opinion that if a placing does come in the coming 8 to 18 months, its will be mostly funded by HK cash.......again, and this would leave the company basically back under the control of a few HK people with all those extra shares sloshing around, and they could then take it private very cheaply, and then list it somewhere else for massive profits - thanks AIM - served your purpose..........kind of thing.

Thanks PP. It's all looking too messy and I've not come back into this, and probably won't do so again.

Outlook not so bright for techy gadgets in the region, and in China...... ?


http://www.forbes.com/home/columnists/global/2008/0324/030.html

..............
Just take a look at recent reports by Japan Inc.s big exporters. Canon, the worlds biggest digital camera maker, warned that earnings this year will fall short of market expectations. Sonys 5% operating margin goal was also recently revised downward. So what does all this mean for investors in the Asia-Pacific region?

First, avoid the large exporters of consumer products such as the already mentioned Sony and Canon, which are being squeezed by lower global demand and higher input and component prices. A stronger yen has not helped either..................

PP best ignored - EK lackey but a great contrarian indicator.

Best ignored unless you want to lose your shirt!!

On Line Limits :

BUY 100K @ 58.93p

SELL 2.5K @ 57.5p (Down from 50K this morning)



Its so cheap and such a bargain someone is willing to sell you 100K at under the offer price.......yeah.....bargain....what do they know ??

Looking extremely weak now............down to just 2.5K for sell volume on line.

Perhaps those director sells at circa 130p levels were very well timed, perhaps they had a crystal ball to the future..........

They always say don't they, if the directors sell, sell too..............advice that should have been noted here perhaps. Bought at 10p sold straight into the placing for big profits........wonder why if the future was so bright ?????


http://www.investegate.co.uk/Article.aspx?id=200703300701420471U

Director/Senior Exercise price No. of options exercised and sold

Raymond Chu 10p 2,350,000
Anita Chau 10p 1,000,000
Lawrence Ying 10p 360,000
Maggie Tam 10p 360,000



On Line Limits falling down yet more :

BUY 100K @ 56p

SELL 2.5K @ 55p

PP posts with manaical zeal on at least 2 boards, one of which seriously regards him as a pest.