18th October 2007 : Leadcom voted "AIM International Company of the Year for 2007"




Main Web Site : http://www.leadcom-is.com/

Investor Relations Email : investorsinfo@leadcom-is.com

Two large buys gone through.
2517

Broker recommendation

10-Aug-06
Leadcom Integrated Solutions LEAD
Altium Capital BUY 53.50p

Target price 105.00p Reiteration

Reiteration is lower now, thats a bitdissapointing PP, i still think its worth more than that dont you?

Critch, that target price does not take into account anything from India. Anything from India is immediate upgrades :)

I would say the overhang is clear, 2.649 million buys and 7K sells by my reckoning today.

Good news ahead of not only results on Monday, but what could be news from India coming in the weeks ahead.

Should not be forgotten India has the potential to boost slightly the EPS for this year, but it can seriously boost EPS for 07 and 08 and 09, and COULD put LEAD on a forward PER of less than 5, and thats not forecast but would be firm order book......so while still speculative to some extent, LEAD is certainly a stock with very good potential in the coming 7 months for a very strong run upwards.

A tick up on L2 this morning, now 5 v 2 @54/57

Looks like a Webcast for the results will be available at 6pm UK time on this coming Monday.


http://www.leadcom-is.com/Investors.asp

The BUY rating and 105p target price reiteration is below, from the 10th of August.

As per the Altium report, this takes into account ZERO contributions from India this year and next, and any contract wins from India will mean an immediate upgrade to forecasts and target price.

The move upwards and large buying of recent days could be linked to the award of a big CDMA contract to ZTE in India in the past few days.

Leadcom work with ZTE, and ZTE has no local Indian manufacturing ability, so could be using Leadcom's Indian operations.

560 Crore Rp = 120.5 million US$

It might be linked to the sudden large buying of Leadcom shares, and if its this, then its the first of the many potential Indian contracts, and the start of the upgrades to the forecasts. Might be news coming Monday in the results statement ??? Anway, the coming 6 months is going to see lots of contracts awarded in India, and lets hope Leadcom get subcontracted on at least a few of them :)




http://economictimes.indiatimes.com/articleshow/1869081.cms


Chinas ZTE bags BSNLs Rs 560-cr order
MANOJ GAIROLA

TIMES NEWS NETWORK[ TUESDAY, AUGUST 08, 2006 01:33:38 AM]

NEW DELHI: Chinese major ZTE has won a Rs 560-crore order from the government-owned Bharat Sanchar Nigam (BSNL) for providing equipment and establishing a network of 25 lakh fixed wireless phones (FWP) using CDMA technology. The hardware will be used in providing telephone connections in villages. The company aims to provide telephone connections in most of the villages in the country by the end of FY07.

As per our plans, we will start deploying CDMA systems very soon and the phones will be available from December. By the end of this financial year, whole of network will be deployed, said RL Dube, director (planning) of BSNL. The company is using wireless technology for providing telephone connections in villages as it is cost effective and easy to install.

The department of telecommunications (DoT) has already said that the rural telephone connections on wireless technologies will be eligible for subsidy from the universal obligation fund (USO). Earlier, the USO could be utilised only for the wireline telephone connections.

We will cover almost all the villages, except some hilly terrains, by March, said Mr Dube.The tender for CDMA-based FWP phones was invited when Huawei failed to deliver equipment in an earlier tender for 10.5 lakh telephone connections. Huawei was the lowest bidder in the tender for installing a network of 10.5 lakh CDMA lines. It participated in the tender with two Indian companies HFCL and the government-owned SCL.

The company was issued a show cause notice by BSNL. At one stage, BSNL was even contemplating banning Huawei from participating in any BSNL tender for a year. However, later the BSNL board gave clean chit to it and didnt take any action against it.

In the earlier tender, Huawei had quoted a price of Rs 150 crore for supplying 10.5 lakh lines. The new price is about 40% higher than what Huawei had quoted in earlier tender. The government has not yet given permission to the Chinese equipment companies to set up manufacturing units in India. Therefore, ZTE will have to import equipment in the country.

The time for the award of the BSNL big big contract draws nearer, and 21,400 Crore is approx 4.6 billion dollars. Also some new news of an MTNL expansion plan of circa 2408 Crore (approx 518 million US$)
All these big expansion plans make the recently awarded 120 million CDMA WP contract for ZTE from BSNL look very small. As has been said, India in the coming 5 years is going to be expanding at a mouth watering rate for companies like Leadcom :)


http://tinyurl.com/jyyfv


BSNL to expand mobile network by 63.5 million lines

New Delhi | August 10, 2006 5:06:44 PM IST

Bharat Sanchar Nigam Limited (BSNL) Board has approved the expansion of its mobile network by 63.5 million lines at an estimated cost of around Rs. 21,400 crore.

Informing the Rajya Sabha, the Minister of State for Communications and Information Technology, Dr. Shakeel Ahmad said that a tender for procurement of 45.5 million lines network has already been floated by BSNL.

The Minister further said that a proposal is under consideration to extend subsidy support for creation of infrastructure to provide mobile services in rural and remote areas, where there is no existing wireless coverage.

"BSNL has proposed to provide mobile coverage to villages having population greater than 200 progressively subject to techno-commercial feasibility," Dr. Ahmad said.

The capacity proposed is also targeted to create at least 50 percent of 250 million network set as an objective by the Government, he added.

Dr. Ahmad informed the House that as against the target of 250 million connections set by the Government, which is planned to be provided up to the end of December 2007, 153.18 million connections have already been provided as on June 30 2006.

Replying to a question asked by Shobhana Bhartia, Dr. Ahmad said that MTNL also plans to invest Rs. 2408 crore for providing 6.4 million lines during the Eleventh Five Year Plan (2007-12). (ANI)

You night be right on all counts PP but there is the rather unfortunate Israeli connection which could be a problem in gaining contracts.

coeliac1, no problem with gaining contracts, business is business, its only the cranked up media who like to push out the scare stories, nobody in the real business world cares.

Looks like the ceasefire comes into effect as well now, that should be a boost for the SP as well (as some will say it removes the risk of total middle east war, not that it was going to ever happen anyway).

Solid results today, great outlook.

Webcast at 6pm today to listen to, link is via the Leadcom website.

Good summary of the webcast from a post on AFN :

Masurenguy - 14 Aug'06 - 18:37 - 1839 of 1840

From this evenings webcast (14/8/06):

1. Leadcom expect that the Indian Capability Trial will be completed within 5 weeks but they anticipate that they may be in a position to make an announcement earlier than that.

2. Leadcom has been invited by one of their partners in the US to participate in a major rollout project which could commence during the first quater of 2007. They did not indicate any potential value in relation to this but the implication was that this would not be insignificant.

3. The existing pipeline was confirmed as being north of $300m as at July 06.

4. Leadcom state that the existing quantifiable opportunity in India is currently $66m and that the potential opportunity could be in hundreds of millions of dollars.

The forecast figures quoted do not take any India potential into account, as before, any India contract wins coming means immediate upgrades to earnings forecasts :)


Extract from http://www.armshare.com commentary :

.........In July, a Caribbean operator signed a letter of intent to purchase a turnkey solution, including civil works, installations, commissioning and integration - the value of the agreement is c.$15 million over the next 18 months, a third of which is expected to be recognised in 2006.

..............................The interim results to June 2006 showed sales of $61.8 million (2005: $46.8 million), pre-tax profit of $5.7 million (2005: $4.3 million) and EPS of 4.0c (2005: 5.0c) - the tax rate was 30% (2005: 7.1%). The company reported that the gross margin was 28.5% (2005: 27.6%); the board expects 2006 to show 40% growth over 2005.

Research Standing

We said "Analyis is more easily practiced on operators nearer home." Despite this Little Englander stance, this company's performance commands attention.

The company broker's note dated 14th August projects EPS of 4.4p for 2006 (based on 30% tax charge vs 17% for 2005) and 6.4p for 2007 representing P/Es of 12.95 and 8.9 respectively based on the share price of 57.0p at 14th August...................

PP

The increase in profits is being eaten up by the option costs and tax. Net post tax profits were actually down. The balance of the profits as between management and shareholders seems skewed overly towards the former- eg over 30% of profit over $13m, before option costs, goes into their back pockets. Add the options and standard pay and the management are doing nicely, thank you. I am feeling cynical about value of Lead to shareholders.

coeliac, the tax increase to full 30% certainly did effect the post tax profits, but that is expected, LEAD is now at the 30% rate and it does not go up anymore. I would expect a week or so of weakness as T's are taken out, but then the news flow will be strong I am led to believe Sept through to year end, so am hopeful that the real value of what they have been doing at Leadcom will come shining through. They are set up for impressive growth, and can now, we hope, deliver on that.

Some big big trades today, and also a tick up in the afternoon. No idea whats going on, but perhaps (fingers and toes crossed) the overhang is reduced or clear now...........

The price has been non-responsive to buying recently, always drifting back, which points to slack in the free float, and here's hoping we just got some of it clear.

Personally with news in the web cast that some India news is due in September, you would expect some large positions to be taken up ahead of this.

The webcast stated an update on the capabilities trial in less than 5 weeks, lets hope they have a contract waiting to be signed on completion to start the India ball rolling. Looks like the JV in India is 99% owned by Leadcom, so no reduction, in LEAD terms, of profits it generates. Based on that 5 week comment we should be news w/c 11th Sept, if not before.



http://uk.biz.yahoo.com/14082006/214/leadcom-enjoys-strong-first-half.html


Monday August 14, 11:20 AM

Leadcom enjoys strong first half

LONDON (ShareCast) - Telecom services provider Leadcom continued higher today after it reported a strong performance at the interim stage and said the outlook for the second half of 2006 is positive.

Net profit for the six months to 30 June was (Advertisement)

1% better than a year ago at $4.05m on revenue 32% higher at $61.76m. Normalized pre-tax profit, before expenses in respect of share options, was up 35% to $6.56m.

Revenues achieved in the Central American-Latin America, and Europe, Middle East and Africa regions and India, which comprise 84% of the group's total revenues, were up 44% on a year earlier.

Israeli revenues fell slightly due to the company's focus on higher margin opportunities.

The group expects growth trends experienced in the first half to continue, with its current order book, frame agreements and pipeline of opportunities for 2007 giving it good visibility.

Leadcom also said it is in discussions with its vendor partners regarding the expansion of already existing cooperation in India.

In addition, it is in the process of a capabilities demonstration trial and is confident that a successful completion of the trial phase will be followed by a "sizeable" amount of business performed in India during 2007.

"Management is comfortable with current market expectations and expects to record 2006 as the fourth consecutive year of a 40% level of year-on-year growth, improving profitability margins in areas of current operations, and penetrating new territories and countries," said the group.

As ever, anything from India is upside :)

http://www.leadcom-is.com/admin/literatureSubCat/Filesdownload/CS_H1_2006_August_06.pdf

From HB's Broker Round Up:

Altium Securities ....., has a buy rating and 105p target for Leadcom (LEAD.L)