14th Nov 2006 T&G Comment in Post 3 : Link Back to posts Click Here



Group Web Site : http://www.xko.co.uk/

Powerdebt Web Site : http://www.powerdebt.co.uk/home.php

UBM Web Site : http://www.utilitybilling.co.uk/

Shares in Issue : 42.68m

Following the sale of the Software Services side, which on a pro-forma basis reduces debt to basically nothing, XKO is now all about Revenue Assurance. This should be an area of high growth, and XKO should soon reflect this in terms of performance put in so far and prospects to come, by a re-rating.

What is it ? The Revenue Assurance division specialises in complex Revenue Assurance and debt management for major utilities. There are two units in this Division, UBM ( current customers include giants like npower, Centrica etc..) and then Powerdebt (which is a specialist Revenue Assurance and Debt Management business based in Solihull.

So XKO is now in basic terms debt free, putting in decent earnings, with good prospects going forward, UK based and with a nice dividend to boot.

Add on to that some earnings enhancing acquisitions in the Revenue Assurance side, and a strong growth high margin business is building nicely.

edcrane - 14 Nov'06 - 09:50 - 41 of 46 (premium)

Teather & GReenwood comment following results .... raising forecats and BUY recommendation

When Will the Market Recognise the Value Here?

Revenue Assurance Services Plc, formerly XKO Group, has reported interim results this morning, its first since the disposal of the ERP software business and therefore completion of its strategic transformation into a focused provider of revenue assurance services, currently to the utility sector. H1 results, stripping out the contribution from the disposed software business, delivered revenue of 7.93m, adjusted PBT of 2.82m and diluted EPS, on the same basis, of 4.73p. An interim dividend of 0.4p was awarded representing a 52% increase over the previous period reflecting the strength of underlying growth and cash generation.

On the back of this, we have raised our FY 2007 revenue target from 14.6m to 16m, and increased our clean PBT forecast from 5.25m to 6.25m. Our EPS estimate rises c11% to 9.8p, and we have moved our total dividend forecast up from 1.3p to 1.8p. We have been less aggressive with the revisions we have made to our FY 2008 and FY 2009 forecasts, simply as acknowledgement both of the fact that timing of unbilled error discovery is, by its nature, difficult to predict, and to reflect the fact that there was already the assumption of new contract wins underpinning our previous numbers. Our FY 2008E EPS figure moves up to 11.5p, from 11.2p, while our FY 2009E number rises to 13.8p, from 13.6p.

Looking ahead, there is much to attract the investor to this stock. The new entity is now a clearly focused business, operating within a premium growth market with both organic and acquisition-related opportunities available to sustain and, potentially, enhance this growth profile. The balance sheet has significantly strengthened, the business model is highly cash-generative (cash conversion in H1 was c103%), while any concerns over the re-tendering of contracts have been overblown. A calendar 2007E PE of 8.5x also looks outstanding value against a support services sector where multiples in the mid to high teens are common. We are retaining our 140p target which represents a multiple of only c12.5x calendarised 2007 earnings and firmly reiterate our Buy recommendation.

4

5

Nice start to life as RAS

L2 4 v 2 @98/101

L2 on the up, now 3 v 1 @99/101

Nice 335K protected buy from earlier been posted.

L2 now 2 v 1 @101/104

Ticking up nicely. Should be on to test 125p soon after those results and outlook. Its cheap compared to peers. 15 times current year pr EPS would be over 140p as well.

L2 nice and blue, now 2 v 1 @104/106

Solid day, more to come, under 130p is cheap IMO.

From a post on AFN :

zho - 16 Nov'06 - 16:20 - 38 of 38


http://www.growthcompany.co.uk/recommendations/30077/revenue-assurance-services.thtml

Companies: XKO
14/11/2006

November marks the dawn of a new era for the company formerly known as XKO Group, with a new name, a new sector and a new focus 'revenue assurance'.

It has appropriately been re-named Revenue Assurance Services (RAS), having sold the last part of its erstwhile divisions for 15m in October making for a gross 28.5m for the sum of the old business. This allows chief executive Simon Beart and his management to concentrate on the revenue assurance businesses acquired last year.

The group provides three services to its utility company customers: consultancy, where experienced consultants and proprietary software identify and secure un-billed debts; collections, which is telephone-based debt collection of existing debt; and metering services, where a meter-reader is sent to business premises to physically check gas meters. RAS has around 30% of the gas utility market at the moment, including customers Shell, eOn and Centrica but at three times the size, the electricity market is a significant target.

Utilities face ever more pressure to keep their costs down and RAS offers a great outsourcing option, with no clear competition yet. Although there is some opposition to their adoption from the utilities in-house collection departments (and contracts can therefore take around two years to win), Beart stresses that his consultants levels of success are incomparable and he is confident of adding contracts in both gas and electricity. He says the balance sheet is under-geared and is pondering acquisitions.

The business is achieving 40% margins, taking 3.3m cash from 7.9m sales in the half year to September, with profits before tax of 2.1m. House broker Bridgewell has upgraded year-end numbers to sales of 16m, profits of 5.66m and earnings of 9p per share.

Growth Company Investor recommended buying the shares at 106.5p in June but, with earnings upgraded to provide a prospective p/e ratio just over 11, its worth adding to your holding.

RAS is the main buy recommendation on IfG this weekend its said. I do not have access myself, anyone with can they advise if it is.

http://www.investing-for-growth.com/

This was the summary on Friday from the I.C. after the results ( http://www.investorschronicle.co.uk/ ) :

"Its name may be different, but neither the story, share price, nor forward PE ratio have changed much since our last buy advice, which we reiterate. Buy."

2 MM's blue so far, now 2 v 1 on L2 so we might be in for another steady blue week, as people realise what good value RAS is below 130p given the sector and growth and the fundies behind RAS now.

Nice day, apart from the fundamentals behind this deserving a higher price, it would appear from small talk a deal with Centrica is near to happening. News on that might be a spark to a quicker rerating.

IMO, DYOR !!

L2 up and now 3 v 1 @113/115

are u talking to yourself papal?

Yep :)

On todays free email from GCI ( http://www.growthcompany.co.uk ):

November marks the dawn of a new era for the company formerly known as XKO Group, with a new name, a new sector and a new focus on 'revenue assurance'. It has appropriately been re-named Revenue Assurance Services (RAS), having sold the last part of its erstwhile divisions for 15 million in October - making for a gross 28.5 million for the sum of the old business. This allows chief executive Simon Beart to concentrate on the revenue assurance businesses acquired last year.
The group provides three services to its utility company customers: consultancy, where experienced consultants and proprietary software identify and secure un-billed debts; collections, which is telephone-based debt collection of existing debt; and metering services, where a meter-reader is sent to business premises to physically check gas meters. RAS has around 30 per cent of the gas utility market at the moment, including customers Shell, eOn and Centrica - but at three times the size, the electricity market is a significant target.

Utilities face ever more pressure to keep their costs down and RAS offers a great outsourcing option, with no clear competition - yet. Although there is some opposition to their adoption from the utilities' in-house collection departments (and contracts can therefore take around two years to win), Beart stresses that his consultants' levels of success are incomparable and he is confident of adding contracts in both gas and electricity. He says the balance sheet 'is under-geared' and is pondering acquisitions.

The business is achieving 40 per cent margins, taking 3.3 million cash from 7.9 million sales in the half year to September, with profits before tax of 2.1 million. House broker Bridgewell has upgraded year-end numbers to sales of 16 million, profits of 5.66 million and earnings of 9p per share.

Growth Company Investor recommended buying the shares at 106.5p in June but, with earnings upgraded to provide a prospective p/e ratio just over 11, it's worth adding to your holding.

Market cap: 48.44 million Ticker: RAS Share price: 113.5p

No you are not talking to yourself.
I am following this. It climbed 6p today to 119.
Has it run out of steam?
FDP just finished a climb.

News is due on contract renewals.

I am hoping for 125p to 130p as a new support level once it goes through it.