Does anybody know much about this company, graph looking good from previous lows??

Kivver,

Interested but funds tied up elsewhere.

Kivver this was featured in The Momentum Investor, (June) as a buy at 96p...

up again today, it certainly has momentum but why?

Kivver,
Sorry for delay in answer. This one has only been going since april and line of resistance at 94 has been broke in the last two or three days we now have to wait and see if the l of resistance becomes support. A number of indicators are bullish and others are neutral. Sorry cant be more helpful. SD

May just have bottomed now

looking stronger and turning around

ABOUT SPECTRUM

Spectrum Interactive is the UK's leading independent public access internet kiosk operator with over 1,715 kiosks nationwide.

Spectrum Interactive plc floated on AIM in April 2005 and is chaired by Lord Young of Graffham former Chairman of Cable & Wireless. The company has a turnover of c.a 18m per year and has operations in both the UK and Germany providing public internet services and managed payphones to in excess of 1,000 corporate clients.

In the UK Spectrum have built up excellent relationships with their premier clients such as BAA, working closely with its client partners to deliver a flexible and competitive service to the millions of people using the UK's busiest airports and currently operate internet services in 18 of the top 20 UK airports as well as over 300 hotels nationwide.

Spectrum have extended their public internet service to encompass a WiFi capability for laptop and PDA users, often combined with the Spectrum Cyber-Desk to create a communications area within a busy site. WiFi access has also been enabled from London street payphone kiosks in partnership with T-Mobile. Spectrum are actively developing a product roadmap for its internet product group.

FINANCIALS

Mkt cap 7.9m
Net borrowings 5.7m
Share price 23.5p
EPS at interim stage 3.72p
Broker f/c to June 2006 6.5p eps & 1.9p dividend.
Broker f/c p/e ratio 3.6
(No tax payable on eps 2006)


NEGATIVES

Phone revenue declined 20% year on year, and recently the company has bought more payphone estate. The German operation had a difficult year albeit profitable, with fierce competition from mobile phones.
Net Debt is fairly high, although Interest costs have reduced 60% after IPO funds. Some theft from Payphones.


STRATEGY

Spectrum aim to convert Payphones into a growth area, by more advertising, the recent payphone acquisition added further estate, to offer greater coverage. Moreover, they are slowly turning payphones into ATM's & Payphones, 33 so far, slower than expected because of some local authority objections, but from these they receive 3,000pa & a transaction related fee. Also Microcells (for 2G & 3G) are being housed in payphones & WI-FI too, all these factors helped reduce the 20% decline in payphone call revenue to just 6% payphone revenue decline.

A further strategy is to use payphone cash to expand their Internet activities. This grew 400% at interims & 58% organically.

They say that Internet activity should be the main part of the business within 3 years from Feb 2005 IPO. This year should see something like 5m t/o compared with 14m elswhere, making circa 19m.


THOUGHTS

I think this company has been only superfically looked at by many investors. I can see why they bought 638 payphones recently in hotels etc; not only a one year payback, but also new blue chip clients, that they can sell their interet activities too, these profitable units numbered over 1200 at interims & now stand at 1715.

I can see why payphones have been bought for a song & even with the current decline in payphone call revenue are expected to pay back in just over 2 years, it makes Spectrum much more attractive, to house ATM's Microcells, Wi-fi & give greater coverage of adverstising, for which they have many blue chip names.

But best of all we have a rapidly growing Internet core, which I guess it could be argued you are buying for a little more than the current p/e ratio of 3.6 providing the payphone revenues only decline say another 5 or 6%....this will depend on the ATM growth, advertising & Microcell & Wi-fi growth....of which incidently the latter is expected "to grow significantly"


The ex German CEO appears to have helped slaughter the share price to it's current level, but the overhang appears to have largely gone now, at this stage while investors are overlooking Spectrum, will they in two years time when the interactive business will be the main part of the business, if objectives are acheived?

looking a cracking recovery stock now, p/e circa 3.5 yield 9%, overhang appears gone, 4 annoucements of new Internet & WI-fi business in August.....................take a look at the graph.

Steady progress, despite other small AIm shares suffering, p/e of circa 5, shut London Office, paid off 1m of debt & only c33% gearing, and a fast exapnding tech side.

Bit high on the debt level isnt it Peter?. Always thought you kept well away from companys with debt to service.

FINANCIALS

Mkt cap 7.9m
Net borrowings 5.7m
Share price 23.5p
EPS at interim stage 3.72p
Broker f/c to June 2006 6.5p eps & 1.9p dividend.
Broker f/c p/e ratio 3.6
(No tax payable on eps 2006)

Must admit it does look tempting and could have a good run in the next 6 months. Its very cheap for a telco stock.

Debt was 11m Roger, now 5m, paid 1m off last year alone.

The figure above isn't accurate, if you check the last trading statement, it's now 5m.

Now they are (excluding exceptionals this year for london office closure etc) making 2m a year, so debt is just 2.5 times profit, also with circa 15m of assets, it's only geared at 33%.

Companies I am wary of are those with 100% or more gearing.


The tech side is really growing fast, and will overtake the 'cash cow' side, I think it's overlooked by many, because of growing things like advertising,ATM's & Microcells & Wi-fi, even the payphone cash cow only declined 6% overall.

Furthermore I they have over 80% of Airport people footfall, in their airports for Internet & WI-FI may become a new section on it's own with over 1m t/o this year expected.

Even on a 20% tax charge, eps is expected to hit circa 6p at 25p share price that is cheap.

And even the boring recent payphone acquisitions are going to pay for themselves in little over 24 months, that's good business, especially as they were bought to get leads into the faster growing interactive area.

Along with Ashpool a major holding for me Roger.

Blimey if its a s big as your ashpool holding you must be backing this one very seriously. Im very tempted.

Many thanks for the analysis above.

No problem, a pleasure.

News for Early Sep & August:

September 2006
UKs fastest growing airport (Blackpool) gets Spectrum Internet desks
August 2006
Spectrum add WiFi CCTV at University of Sunderland

Sinatra- London Palladium show..... promoted on over 200 Spectrum central London payphone sites.

Spectrum Internet services sign 3 Landscove Holiday Parks

St. Christophers Inns extend internet contract with Spectrum

Spectrum add Bristow Heliport to its Aberdeen Airport operations ... providing WiFi & Internet Desks

Spectrum are pleased to announce the completion of their installations into nearly 170 Premier Travel Inn hotels across the UK.

Spectrum expands Travelodge WiFi internet services from 26 to 96 (270% increase)

New 5 year contract signed with Bristol Airport, Internet kiosks doubled.

Profits expected to be slighty below forecasts excluding exceptionals (f/c 2.2m) Directors confident of reasonable growth in Revenue & profits for 2006-7.

Wifi expected to exceed 1m t/o for 2006-07

Net debt reduced by circa 1m in 2006 to 5m.

Peter are they in direct competion with BT with the old pay phones what used to be the old red kiosks? or have they bough some of the BT estate?.

Thanks in anticipation.

Roger their payphone estate is mainly London, with some cracking locations like Leicester Square. They are the second biggest after BT & payphone services made just short of 1m at the interim stage, a superb cash cow, to pay off debt & fund the fast growing interactive side, also payphones are having ATM's attached to them, to bring in further revenue, advertising as mentioned, Wi-fi hot spots in conjuction with T Mobile, & also Microcells which should further increase with 3G.

Their phones seem to be kept in good clean order and many pics can be found on the website http://www.spectruminteractive.co.uk/index.php

Thanks peter Ill have a look at the site.

Forgot to mention the final divi should be around 1.5p too...results 26th of this month.

8th-September-2006

PRESS RELEASE

Spectrum open latest Internet Retail Shop at BAA Heathrow T1 Arrivals



Spectrum has taken the opportunity offered by BAA, to add an additional Internet Retail Shop at Heathrow T1 Arrivals.

The new Retail Shop located in the Heathrow Terminal One landside arrivals area, in ideally situated and operated unmanned 24/7 in a prime location. The new area is in addition to other recent retail investments within BAA including Heathrow T1 checking and Gatwick Village shopping areas.

Daniel Gray, Head of Group Marketing and Product Innovation, comments "we are committing to BAA with serious new investment, and with new bespoke designs, focused on their retail and airport environments. Our other recent BAA retail areas have proved highly successful, and we look forward continuing close relations with BAA, to maximise these areas". 8th-September-2006

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11th-September-2006

PRESS RELEASE

Spectrum Interactive complete clean sweep of London Airports - Internet now at Luton Airport


Spectrum Interactive plc is to install Internet Desks at London Luton Airport, resulting in Spectrum operating Internet Desks at all five of London International Airports, (Heathrow, Gatwick, Stansted, City and now Luton).

London Luton Airport and Spectrum have agreed to build an Internet Retail Shop, similar to four others that Spectrum has built this year at BAA's Heathrow and Gatwick Airports. The desks will operate a range of functionality including surfing, MSN Messenger, word, excel and USB port functions.

The latest addition to Spectrum's BAA retail installations is at Heathrow Terminal One Arrivals area which opened this week, with a bespoke design, 10 internet desks, and even a helpdesk telephone area.

With nearly 1,800 installed desks Spectrum has been a leader in public access Internet Desks & Kiosks for a number of years, and are the market leader in UK Airports. Spectrum has contracts directly with 21 airports in England and Scotland, as well as operations with concessions within two further airports.

Daniel Gray, Head of Group Marketing & Product Innovation for Spectrum Interactive, commented, "we are extremely pleased to complete this agreement and to reinforce our position as market leader for public Internet Access at UK airports. In line with our product strategy, we are currently developing new features and services to offer through our desks, which will generate new revenues for Spectrum and it's airport partners. Spectrum continues to operate successfully in the busiest, most demanding, and high profile locations!"

Up 4.5p but still the p/e is little over 6 & a cracking divi, to boot.

I understand from the latest broker note that

Advertising revenue was up 32% in street phones.

Payphones didn't decline as much in the second half as the first half.

this year financial forecasts are 2.5m profit before tax 5.9p eps (20% tax c)

next year 2.8m profit before tax 5.8p eps (30% tax charge)


Yield 6%+ at current price.