My 1st post on Money am, so be gentle ;)

My main holding is SCi Entertainment, a former darling pre-bubble. It like many in early 2000 had a shocker of a profit warning, but has since grown up, knuckled under and generating cash.

Its recent history speaks for itself

30 Sep 2001 (GBP)
turnover 2.05m
pre tax profit -10.48m

30 Sep 2002 (GBP)
turnover 17.71m
pre tax profit 2.21m

30 Sep 2003 (GBP)
turnover 28.48m
pre tax profit 3.52m

Everything inline for 2004, although by my research 2004 H1 well ahead.

Single digit pe and loads of growth.

However, hardly any interest by the retail investor. In fact, this looks to be the 1st thread on Money am re SEG.

So why the cold shoulder for SEG, what am I missing?

Stan,it will only be a short on eid,3 months max or 12%,,i think i will dig out the italian job tonight for the play station,off out now.

Hi Guys,

Well at last SCi are getting noticed amd all my research is paying off, haven't sold a single share in my core holding but have traded it up to add to the core holding. Its all rather exciting at the moment and there is lots more to come and the SP should more than double again on a twelve month view.

Whilst you have mentioned EID they are a terribly run company but am currently long for a possible takeover/mbo, may see a quid if were lucky but don't bank on it.

Now whilst everyone has been getting excited about SEG I have also been building up quite a holding in BIT. The reason is simple, SCi's buisness model works and at last the city has woken up to this fact. What the city has missed, whilst it works for SCi it also works for their developers. Constantine is SCi's next big release and BIT will benifit by having royalties guranteed as soon as the game is shipped to market. The amount obviously depends on the continued sales of the game but BIT will recieve approx 2 for every game sold over 300k units. With SCi's buisness model it quite likely the initial ship will be a minimum of 500k i.e. 400k straight to BIT bottom line, however Enter the Matrix has shipped in excess of 5m units so the scope for additional revenue is high. SCi have not capped BIT royalty, so if the game ships 1m that would be 1.4m to BIT, 1.5m would be 2.4m etc. etc.

If you take a look at BIT market cap, you may realise where I'm coming from.

Conclusion
SCi's track record over the last 7 years has been mixed. Record years had been followed by periods of heavy loss whilst accounting policy changes and non-games investments have not helped even out the Company's performance. However, many of the more fundamental problems experienced by SCi have been symptomatic of those experienced by nearly all small publishers with limited capital. With typical 18 month development cycles (and a further 3 months before cash tends to be received on any given product) and 1m-2m average development costs and further pre-release manufacturing and promotional costs, it is very difficult for smaller publishers, with limited working capital, to maintain a consistent flow of high quality product. In such situations, publishers tend to focus on niche or lower quality/cost products (difficult to get right and limited upside) or make a conscious decision to pursue an inconsistent release schedule in order to focus on high quality products. Whatever the strategy adopted, small publishers can often find themselves stuck in cash-flow rut and unable to grow either rapidly or consistently.
The 20m fund-raising in November 99 was a critical turning point for SCi. It has allowed the Company to increase its product investment and release momentum to a level which allows at least 3-4 major new titles to be released each year (thus considerably increasing the chance of a hit ) with the consequent cash flows allowing this momentum to be maintained in subsequent years even with average sales. The first fruits of this investment were felt during the Company's FY02 in which the Company established its first new 1m unit-selling franchise, Conflict, since Carmageddon and recorded record sales and profits. Since then the Company has not put a foot wrong and reported sales and profit increases in FY03 and are expecting further growth for FY04. The Company consolidated its high quality development focus in late 2003 with the acquisition of Conflict developer Pivotal in what should be regarded as one of the best games M&A deals of recent years. Although the purchase flies in the face of the Company's stated strategy of using third-party developers only, the consideration of 2.4m will be recouped within a year if not sooner and ensures the uninterrupted continuation of SCi's biggest franchise.

Vivendi Universal Games has denied that it has any interest in SCI Entertainment.

An article published in The Business earlier this week had suggested SCI, which recently acquired fellow UK publisher Eidos, might find itself the target of a takeover bid, and a list of potential suitors quickly grew to include Vivendi.

However, in a terse press release issued yesterday afternoon, the Paris-based games published refuted any such claim. "In view of articles published in the UK press, Vivendi Universal denies any interest in Sci Entertainment and also denies having made any offer," the statement read.

One company put forward as a potential buyer by analyst Nick Gibson in the Business piece was Midway Games. Gibson said of a potential match between Midway and SCI, "they both would benefit from the synergies of being put together".

Midway was anticipating a massive loss of $95 million for the full fiscal year. The charges outlined in its SEC filing could make the situation even worse

Massive selling today...dropping by 40p to 485p

time to take a new look at this computer programme publisher ..... sp has now surged through a pretty stubborn resistance at 500 and has plenty of steam ....... volumes tend to be modest at +/-600k and have already shot past that today ..... Perhaps more importantly, price tracked back to test 200 dma and bounced firmly back up with seeming impetus behind it.




Green line = 200 dma
Red line = 50 dma

i'm nuts! ... or at least i think i must be, for i still hold this stock, though the chart is VILE ..... strange thing is, the company seems to have done nothing wrong, comes out with a positive announcement this morning, yet sp tanks ..... there are some indications of a resistance just below the current level (see longer range chart), but hope i resist the temptation to average down .... after all, i tell everyone else not to!

This one usually comes good in the second half of the year if my memory serves me right.

it needs to perform the lazarus trick!

I was amazed to see the shares falling further. I firmly believe this company is on the right track and with them managing to secure the advertising rights of the new hit series called Heroes on Sci Fi then i thought it was the right time to back them. Heroes, is making huge Impact in the states and seemingly in the new "Lost". Great progamme if your into that sort of thing. I'm in for the long haul!

very good bounce today, but am still glad i resisted the temptation of averaging down, for i know that is the route to perdition

Shot up to 350p (over 16%) from 2pm to now.

Large volume but no news out yet.

And here's the reason why http://www.moneyam.com/action/news/show/Article?id=2222640up another 14%.

Up another 11% as two more bids come in

http://www.moneyam.com/action/news/showArticle?id=2273789

Sliding today to 275p, likely Mr Tchenguiz has sold out of it to pay up for SBRY misery.

Closed at 248p today

not often that a company that is a t/o target dives to the depths .... story is that the company is worth bugger all and that is all they will get for it

Another short opportunity yet to come probably.

I totally agree, Greyhound. If there is a takeover, the price will be reduced anyway. If there is no takeover, the sp will crash. Win-win situation.

Made a small profit now...218p now...likely to go down further