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

Another small contract win, with the prospect of an increase in the order. All good news, just need a biggy.
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There we have it. News on the bonds is that Leadcom now have an A3 rating, and never need to do a placing ever again, can be done via the bond market :)

And also a contract win in India to boot, outside of BSNL and the new Reliance mega tenders.

When BSNL gets firmed, looks like in January, then sit back and wait for what it means for Leadcom, it should be company maker, and potentially will boost 07 revenue from the expected 180m$+ to a lot lot higher, might even seen say 300m$ revenue in 07, and more in 08 and 09.



http://www.investegate.co.uk/article.aspx?id=20061215104900Z5284

"Leadcom (LEAD) Friday 15 December, 2006
10:49A - Re Contract

Leadcom Integrated Solutions Ltd

Leadcom Announces New Win in India

Leadcom Awarded 'A3' Rating by Midroog, Moody's Affiliate

Leadcom Integrated Solutions Ltd. ('Leadcom' or 'the Company'), (AIM: LEAD), a leading international provider of innovative telecommunication solutions, is pleased to announce that it has been awarded a new project with one of its global strategic vendor partners.

The project, in TSP (Total Service Provider) model, will include Civil, Electrical, Telecom Implementation and Project Management services in one of the major Circles of India. The value of the first phase of the project is approximately US$10 million, which will be recognized in 2007.

Ilan Menachem, General Manager of the Indian region anticipates that this project may grow significantly in both scope and volume.

Leadcom also announces that it had been awarded an 'A3' rating by Midroog, an affiliate of Moody's Investor Service. This rating will facilitate Leadcom raising unsecured funds from the bond market alongside its existing sources of bank finance.

Eytan Mucznik, Leadcom's CFO, said that the rating awarded to the Company by Midroog is further evidence of the confidence of the financial community in the Company's financial strength, the continuation of its strong performance and its ability to finance its anticipated growth from its existing balance sheet."

Copy of a post I put on AFN for reference. There is no intention to issue any Bonds as yet, I would imagine that will hapen as and when the BSNL order is confirmed in Q1 07 hopefully (final court hearing is 15th Jan) :


PapalPower - 16 Dec'06 - 02:50 - 3207 of 3207

I cannot see it slippin back.

The news on the A3 credit rating is massive going forward for Leadcom, how many other small caps are there with a rating as such to use the Bond market for funds, thus having access to cheap finanance, not expensive bank debt or dilutive placings ?

Obviously they fully understand Leadcom, something which the market obviously cannot at present.

The fact they have access to funds to seriously go after big growh now, including lumpy contracts like 300m$ from BSNL (which is not in forecasts at present) and then the even bigger Reliance project, and these funds are low cost and also non-dilutive, well, at 54p has the market got Leadcom priced right ? or wrong ?

The Altium update ignored the fact that higher margin work was being won, and also noted the potential for higher cost of money to expand. Looks like Altium were wrong and got it wrong, as Bonds is the answer. Will they be upgrading again now to a higher price target ? I think not yet, that will wait for BSNL contract win news, which we hope will be mid Q1 07, pending the court decision on 15th Jan.

I also think Altium were incorrect on their concerns over higher costs due to the dollar weakening. I think they should be aware that like any company, they have access to different currencies, and if you are buying things based on US$ prices, then now its cheaper to buy, so in effect you are somewhat covered in this aspect. I think margins are going to be better than Altium expect come the late February results.

This new contract in India will use up some cash as it gets moving in the initial stages, thats what working cap is here, pending payments later, so with this new smaller contract in the bag I would expect cash to be lower than the present Altium update, with the obvious increase in debtors levels , as you'd expect from these types of delivery of contracts/systems.

Given the potential for a 300m$ contract in Q1 07 (thats not in forecasts), given they are delivering 40% YOY growth, given they have progressed away fom being a "placing to raise working cap" company now they have access to bonds and also a new even bigger mega tender for Reliance India in 07, then Leadcom should not be falling back, it should now be onwards and past the price target, people are failing to realise what this credit rating means, IMO.

We also should not take anything away from the contract news just out, this is not the big mega tenders, but shows progress is being made and Leadcom India are putting themselves into a position of being able to grow and gain good contracts outside of the big mega tenders that are going to become the norm as India undergoes massive telecom growth in the coming 6 years.

I would expect to see a rising trend, and the institutonals now snapping up spare stock as any comes up when short termers sell on a small rise.

O/T The UK Stock Challenge is now open for 2007 annual entries, and I've put LEAD amongst my choices for the year. Link below for entry form :

http://www.stockchallenge.co.uk/sc/index.htm

O/T The UK Stock Challenge is now open for 2007 annual entries, and I've put LEAD amongst my choices for the year. Link below for entry form :

http://www.stockchallenge.co.uk/sc/index.htm

.

i really must take a better look at this stock ...... certainly looks to have potential

Should be back over 60p soon IMO :)

I put these 3 posts on AFN, so copying here for info and reference, they are just my opinion, so please take them as only opinion, which may be wrong or right. Its also good news to see the Bond issue done, this means the balance sheet is strong awaiting those big orders now, its not going to be long IMO, before the big contracts start coming in a la BSNL in Q1 and a la Reliance later in 07.

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PapalPower - 16 Dec'06 - 13:53 - 3214 of 3304

How much of the BSNL job, if and when, will be attributed to 2007 figures ? Its a question I keep pondering.

Based on a 300m $ contract for Leadcom, over a 24 month period, would the split be say 80m in 07 and 220m in 08 ? or 100m in 07 and 200m in 08, or would it be spread over 3 Leadcom financial years, say 70m in 07 and 180m in 08 and 50m in 09 ?

I'll take my worst case for 07 and say just 70m in 07, to add to the 180m would make 250m sales in 2007, (an increase of 113m$ or circa 82% YOY), that should give around about circa 14 cents EPS in 2007 (also allowing for a reduction in tax from 30& to 29%). 14 cents in 07 at todays exchange rate is 7.14p EPS (should the dollar return to 1.8 levels then that is 7.77p EPS).

Based on running a lowly current year PER of times 15 for 07 that would mean 107p target price based on conservative ratings.

If Leadcom is then rated at such levels 20 times current and 15 times forward, the target price should of course be nearer 150p - expecially when you consider they should be bagging the Reliance mega tender as well, which will again rerate 2008 and 2009 revenue forecasts.

I would thus expect Altium to raise their target price to 105p as soon as Leadcom gets its first orders from Ericsson and Nokia for the BSNL work (court ruling pending of course on 15th Jan).

With the fear of placings extinct for Leadcom through their new credit rating and ability to tap the bond market, a much higher rating should be implied than simply 15 times current year forecasts IMO.

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PapalPower - 17 Dec'06 - 05:59 - 3222 of 3304


Here is a little more info on the new Reliance India Tender, something to add to the spice of 2007/8/9, and yes, due to the complex nature of certain aspects of it, Leadcom will should be involved with the winner/s whoever they might be (just like BSNL, whether its Ericsson/Nokia or Motorola, they would all use Leadcoms expertise).

Final court hearing for BSNL is 15th Jan 07, and all being well sub contracting can start soon after. Add into that the potential to award this Reliance tender as well (and given its India although it should be expected in Q1, it might be Q2), and Leadcom could be and should be rolling in large contracts in 2007. Its dissapointing BSNL did not come in 2006, but this is India and you cannot push the cow up a hill, however it now makes 2007 one potentially massive year for Leadcom.


http://economictimes.indiatimes.com/articleshow/712306.cms

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PapalPower - 21 Dec'06 - 11:53 - 3284 of 3304


A few posts back I worked out a conservative figure based on 250m$ revenue in 2007 giving EPS of 7.41p (allowing for a lower margin on big orders and converting at 1.96 US$ to the Pound).

Given we roll into 2007 financial year on Jan 1st, and results are out in late Feb, that would put us on a 2007 current year forecast EPS of 7.41p.

Given they would be reporting revenues with growth of over 100%, would 20 times current year be too high a rating ?

If you base then that 2008 would be over 300m$ without Reliance, and likely 500m$ with it, if you go with the 500m$ figure and then say EPS of 14p, and base LEAD on a simple 13 times prospective forward EPS, then you can see for yourself where they will be going.

I would expect Altium to upgrade to a 105p price target once the first BSNL contracts come through for Leadcom, and then another increase once the Reliance tender gets sorted. There are going to be many more mega tenders in the coming 5 years. This time next year there should be no reason for Leadcom not to be over 150p.........but then again, who knows what will happen.

If you place Leadcom on some of the ratings given to some stocks (like 40 times forward forecast EPS), it will blow your mind away, but Leadcom is putting in higher growth than they are, and Leadcom do not intend any more dilutive placings, they can fund work from present cash and also from bonds should the growth be big.

2006 has been a terrible year in terms of stock performance on the whole, this being due to many factors, nearly all outside of the control of Leadcom. However, if 2006 was a year of consolidation of the SP, then 2007 and 2008 should reap very large rewards IMO.

i know PP has ben banging on about this share for ages, so perhaps i am just getting brainwashed .... however, india is undoubtedly a very exciting market with huge potential growth ....... the chart below is for 5 years, which is much longer trhan the usual i post, but have done so merely to show what a messy and volatile thing it is ...... i would certainly be a buyer at closer to 45p, but 55p may not be such a bad price either.

Do not forget to get your 5 top picks for 2007 into the Stock Challenge competition.

Link below, click on the "Entry Form" tab, and then "2007 Annual"

http://www.stockchallenge.co.uk/sc/index.htm


Happy New Year to All

Well, lets hope the turn today signifies the turn and the start of a big uptrend now.

BSNL case due for final verdict on the 15th Jan.

A nice write up and contains the following little paragraph, roll on the 15th of Jan, a final judgement and then contract award.


http://www.hindu.com/thehindu/holnus/001200612290322.htm

"Although the tender by BSNL got mired in legal battles with Motorola challenging its ouster by the PSU on technical grounds, the final judgment is expected to be delivered in January 2007 and the process to award contract may start soon."

PP .... apart from sentimental effect, what diff does the final judgement on BSNL tender make to LEAD?

Nokia and Siemens will place hefty orders on Leadcom once BSNL are allowed to award the tender contract.

This obviously means large upgrades to this year (07) revenue and EPS.

Therefore, it is only a matter of time after the BSNL case is decided, that contract news will come for Leadcom.

Present forecast is 180m $ revenue for 2007 with around 5.7p EPS. Once BSNL is done and the size of the order taken into account, I'll go for 250m $ revenue and over 7p EPS for this year.

PP ..... for you (and me prob) i thought i would post a 3 months chart for more accuracy ..... good to see 25 dma rising nicely and rsi pretty neutral

well PP, you have suckered me in here, so expect a severe thrashing if it's a wrong call .... lol!

This was strongly tipped by moneyweek 22 September, for following reasons

network deployment services worth $900million in 05 set to grow to $1.2 Billion in 08 = 12% growth.

Huge growth of wireless networks in developing countries

Demand for broadband in western economies

trend from telecoms companies and equipment suppliers to outsource

In addition leadcom has impressive list of blue-chip customers

Namely Nokia, Nortel, Siemens, TIM and Millicom

Sales up $61.8m 32% up on same period 05, 10.5% operating margin eps set to almost treble to 6.5p 2007, compared to 2.2p in 2005

Currently p/e 8.4, too cheap at present even without new contracts

time will tell, but certainly looked good enough for me to have a dabble

Nice rise on thin volume.
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