Retail Decisions are market leaders in an industry which continues to grow exponentially. They produce payment fraud systems solutions for major blue chip clients globally, though the bulk of the business is currently coming from the major reatilers both in the UK and US. They are a Techmark 100 company which means that there will always be a level of institutional interest in the company. However, on top of this "forced" interest from the tracker funds there has throughout 2005 been sustained large buying from no other than Goldman Sachs and Barclays. These institutions together now have an investment of tens of millions of shares in RTD !

Website: www.redplc.comClick here to read the old thread

Shares Magazine had a cover feature back in early April entitled "ATOMIC! - Small is about to get VERY, VERY BIG - 7 stocks for the new technology revolution". It was no surprise to see Retail Decisions as part of the selection. Here's what Shares had to say: "Retail Decisions is a specialist software developer aimed at preventing credit card fraud. It owns a database of several million dodgy credit and debit card numbers against which it crosschecks transactions, but also has developed clever software which can spot strange patterns in your spending. This system is perfect for stopping phony credit card transactions. Investors could not ask for a better pure play on rising credit card crime. Perhaps the company's biggest challenge is scale but chief exec Carl Clump is attempting to address this with aquisitions, even if opportunities seem to be few and far between. In the meantime, Retail Decisions remains concentrated on developing in the card-not-present arena, where it already has fantastic experience and technology. The drive to win new customers should also be helped by the fact that it already serves so many blue-chip customers including Marks & Spencer, T-Mobile and, most recently, Federated Department Stores, the US owner of Macy's and Bloomingdales. Let's not forget, too, the company's highly profitable fuel-card business in Australia which grew 30% last year, making this year's forecast low single-digit earnings growth look on the conservative side." Retail Decisions have continued throughout 2005 to rake in very healthy profits from the Oz. fuel card business thanks to the "bonus" of high oil prices and favourable exchange rates. In addition, the extra revenue streams from new major US corporate clients will be starting to filter through. In the US, Retail Decisions appear to be chosen on many occasions over their main rival Cybersource which indicates just how well this company is doing. The demand for card-not-present (i.e. internet/phone shopping) fraud software is going to continue to grow and grow so RTD presents guaranteed success in this arena - backed up with the cash cow fuel card business which is being extended into locations other than Australia and we have a real gem of a company. Longer term target 1+.

I wonder whether "issuing new equity" involves a rights issue, or assimilating this "target" company by increasing the number of shares in circulation (in order to buy out the existing holders of the target company)?

The release is worded in such a way that it leaves too many questions unanswered.

Key points are

1. What is being aquired.
2. On what terms.
3. How exactly it will be paid for - cash, shares.
4. Will it will require a placing or a right issue.

If RTD is really in the "final stages" then we will know soon enough.

A shame that the board could'nt get this out when the price was above 30p, and at an earlier stage in the negotiations. They may have thus destroyed much of their potential "firepower". At a hefty cost to the shareholders - large and small.

The release is worded in such a way that it leaves too many questions unanswered.

Key points are

1. What is being aquired.
2. On what terms.
3. How exactly it will be paid for - cash, shares.
4. Will it will require a placing or a right issue.

If RTD is really in the "final stages" then we will know soon enough.

A shame that the board could'nt get this out when the price was above 30p, and at an earlier stage in the negotiations. They may have thus destroyed much of their potential "firepower". At a hefty cost to the shareholders - large and small.

The RNS below suggests existing shareholders will be included in any fund raising!

Retail Decisions PLC
05 October 2005

Date: Immediate, Wednesday 5 October 2005

Contacts: Carl Clump, Chief Executive
Richard Amos, Finance Director
Retail Decisions plc
Tel: 01483 728 700
Website:
www.redplc.com


Alistair Mackinnon-Musson
Philip Dennis
Hudson Sandler
Tel: 020 7796 4133
Email:
red@hspr.co.uk


Retail Decisions plc

Potential Acquisition

The Board of Retail Decisions ('ReD'), the fuel card operator and a world leader
in card fraud prevention and payment processing, confirms on the back of market
rumour it is in discussions that may or may not lead to the acquisition of a
business whose key activities are complementary to those of ReD. Details of the
acquisition and funding are being finalised, but it is anticipated that the
transaction would be funded partly through issuing new equity to be raised from
existing and new shareholders.

A further announcement will be made as soon as possible.

- Ends -


This information is provided by RNS
The company news service from the London Stock Exchange

551

E-mail presently out of commision


Just cleared up.

Having traded RTD over RTD on and of for up, seem to plod on carefully. Expect price to rise slowly over coming weeks.

The issuing of equity to raise funds looks as if it explains the recent slump in share price IMHO. Those wishing to avoid dilution have been getting out - aren't they the lucky ones - aware of the information in advance of the majority of shareholders - couldn't have been leaked of course ;)

No mg, that could never have happened :-)

leaks to those in the right place at the right time /NO that does happen ////

Could UNG be the target ? RTD could be interested in the HTEC side of UNG, and there was talk of possible RTD interest in August by a poster at AFN (around the same time UNG sold off First Remit and there is inclination of UNG selling of Masterchange leaving them with just HTEC which could make them a takeover target for someone).

A little activity in RTD today.

Indeed - but cannot fathom out what is happening. As the price has moved up I can only assume that someone (or more) has been taking advantage of the fall by accumulating stock. Probably in breach of the FSA rules but no-one will ever be able to prove anything!

Optimistic, RTD is beginning to sound like my bowels 8-)

Oh dear don't say that. I hold UNG as well, another disaster to add to the list.
P.

Morning folks, after Fridays trading activity perhaps we should be looking for something positive to emerge next week.
Let's not forget this company is making sound progress not fighting for survival!
Fred1new, sure you can get something for it :-)

A rise in the SP or something else would do. PJ. I don't think (hope) that RTD will be a disaster.

So, its 20m to acquire the new business, and a major sell overhang has been cleared (Guardian).

Acquisition

RNS Number:5410S
Retail Decisions PLC
12 October 2005


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, REPUBLIC
OF IRELAND OR JAPAN.


RETAIL DECISIONS plc
("Retail Decisions", "ReD", or "the Company")

Major Acquisition and Fundraising


Retail Decisions ("ReD"), the fuel card operator and a world leader in card
fraud prevention and payment processing, today announces the proposed
acquisition of Fuelserv for #21.5 million in cash from DHL Distribution (part of
Deutsche Post Group). ReD also announces a Placing with institutional and
certain other investors to raise approximately #13.3 million net of expenses
(together with an Open Offer to Qualifying Shareholders of a further #5.1
million assuming it is taken up in full). The Group also proposes a share
consolidation.


Fuelserv is the UK's second largest operator, by fuel volume, in the independent
fuel card and 'bunkering' sector with around 6,300 live customer accounts as at
the end of 2004 and with more than 65,000 live fuel cards in issue as at 8
September 2005. Due to its size, the acquisition is a Class 1 transaction for
ReD as defined by the UK Listing Authority, requiring shareholder approval at an
EGM to be held on Friday 4 November 2005.


ReD already has an established and highly successful fuel card operation in
Australia, which in the first half of 2005 accounted for approximately 90% of
the Group's operating profits and 50% of its revenues. The Fuelserv acquisition
will have a transforming impact on the financial position of the Group and
should enable ReD to continue to build the Group's profitability. The
Acquisition will also provide critical mass in a sector of the market that has
high barriers to entry and can realistically only be accessed through
acquisition.



Highlights - the Directors believe the Fuelserv acquisition will:

* Have a transforming impact on the financial position of the Group

* Provide ReD's entry into the UK & European fuel card markets for the first
time

* Build profitability on the Group's extensive Australian fuel card
experience

* Provide cross-selling opportunities of related services into
Fuelserv's customer base - as successfully achieved at ReD Australia

* Extend the Group's exposure to areas of the payments process that
provide greater value and attract greater revenue streams

* Be earnings enhancing in 2006


Fuelserv is considered to be a non-core asset of Deutsche Post, hence the
decision for its disposal. ReD's Board believes the Acquisition provides a good
opportunity to expand ReD's card issuing capability into Europe and create
significant value. ReD's proven ability in the fuel card industry has been
demonstrated by ReD's successful Australian fuel card operation. ReD's aim is
to replicate its successful Australian model in the UK and across Europe by
applying its skills to Fuelserv, including placing greater focus on client
retention and by extending the products and services offered.


ReD's existing fuel cards have clear advantages for the owners of fleets, by
helping them keep their vehicles on the road. ReD's fuel cards have a wide
network of accepting merchants and provide vital information that simplifies the
management of vehicle fleets. These cards also offer non-fuel services through
affinity partners, such as breakdown cover, vehicle rental and hotel
accommodation.


ReD's current senior management, including Chief Executive Carl Clump, have over
80 years experience of the fuel card arena, extending back to well before they
joined ReD.


Fuelserv


Fuelserv is the UK's second largest operator in the independent fuel card and '
bunkering' sector by fuel volume with 65,000 cards in issue and around 6,300
live customer accounts and the end of 2004. Fuelserv is focussed on the HGV and
LCV (Light Commercial Vehicle) markets in the UK, Ireland and mainland Europe.


Fuelserv's audited accounts for the year ended 31 December 2004 show that the
company generating total operating profit of #3.8 million on turnover of #140.2
million and that at 31 December 2004 it had net assets of #11.7 million.


Fuelserv's customers include a number of 'blue chip' clients, many of which are
longstanding. Clients include DHL, Norfolk Line, DFDS and P&O Ferry Masters
among others. As part of this transaction, Fuelserv is also entering into a
four-year fuel management agreement with DHL, under which it will guarantee,
subject to certain limited exceptions, to purchase 70 million litres of diesel
from Fuelserv each year.


The acquisition of Fuelserv is intended to take advantage of the expected
continued growth in demand for road transport and the associated demand for fuel
cards as a method of payment. In the UK the level of HGV road transport has
increased by approximately 17 per cent. in the 10 years to 2003 and the
corresponding level of LCV road transport has increased by approximately 39 per
cent. in the same period.


Funding



To finance the acquisition, ReD has conditionally raised #15.6 million gross by
way of the Placing. In addition, in order to give Qualifying Shareholders the
opportunity to purchase further shares in ReD the Company is making an Open
Offer. If taken up in full the Open Offer will raise a further #5.1 million for
the Company. ReD has also entered into new debt facilities comprising #18
million in total. The Company will use the New Debt Facility and the net funds
raised from shareholders to finance the acquisition, to provide working capital
and to fund ReD's continuing growth strategy. The basis of the Open Offer is 1
New Ordinary Share for each 12 Existing Ordinary Shares currently owned. All the
Directors have confirmed their intention to take up their entitlement under the
Open Offer in full.



It is also proposed to use the opportunity of the EGM to approve a Share Capital
Consolidation. It is currently proposed this would take place on or around 28
November 2005 on the basis of one Consolidated Share for every five Ordinary
Shares owned. ReD's share price has been historically volatile and this
initiative should reduce this effect and in the Directors' opinion consequently
make ReD's shares more attractive to longer term investors.



Commenting Carl Clump, Chief Executive of ReD, said:



"The Fuelserv acquisition is in a sector that we know very well and where we
have demonstrated a great track record. It is also a space that plays to our
managerial strengths. We have searched for a long time to find a corporate card
issuing business which will allow us to build on our current success in
Australia. Fuelserv enables us to progress into Europe along the payment value
chain to the most valuable area, namely card issuing activities "

It all seems sensible and plausible, but I am a little fed up with being patient
.

Slightly disappointed that RTD were not looking at acquiring a business associated with on-line payment verification (ie buying up a small competitor), or pin card verification (in order to expand their sphere of influence), or a company like MiPay (for obvious reasons). This acquisition is solid, dependable and earnings' generative, but it almost looks like they are accepting the limitations of their cnp business and looking for sustainable (but much slower) growth. This might suggest a lower PE rating for the next couple of years as RTD moves away from being considered a hi-tech growth company.

My opinions fwiw:

Appears to be a direction change in the business away from the (supposed) high margin high growth business of CNP and towards the lower margin, cash cow fuel card business.

Fuelserve has net assets of 11.7m and last year had turnover of 140.2m and operating profit of 3.8m. However, this operating profit included an exceptional credit of 0.4m and IT costs were not charged ot the business representing 0.6m so underlying operating profit was 2.8m. Against this there is going to be some additional UK overheads before you get to a PBT level. Therefore this appears a very low margin business though this appears in line with other UK fuel card businesses. It will be earnings enhancing in 2006.

I like the share consolidation, should be approx 80m shares at approx 115p afterwards and via the placing, there is now a stronger institutional sharebase.

My main disappointment is that the apparent change in strategy is likely to see the company valued on a lower PE (due to lower long term organic growth potential). The big question is to whether RTD can increase the margins in the new business using their expertise as a small % increase in margin on 140m turnover will have a dramatic effect on profit