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

I think its all much ado about nothing - in terms of Nokia.

Nokia in CALA represented a lump of revenue, but poor low margin stuff. If, and I hope we hear tomorrow, there is plenty of higher margin work to fill the hole (and you don't need as much high margin to fill a bigger lump of discarded low margin) then the brokers and media have been very wrong to start all the notes of panic they have been spouting.

Fingers crossed...toes as well ;) LOL

down it goes again.........might start shorting this

Outlook for this company is good, turnover set to increase, margins set to increase, bad news all out in the open. This stock will be back at 60p level in six to 9 months so I wouldn't short it, 40-50% upside from here.

As african market comes alive there will be more and more business in the pipeline, in addition to that in India and other developing economies.

Personally see this as a buying opportunity, kicking myself for not part closing my deal of thursday which was at 25% profit in two days, bird in the hand. Still if I had it would have gone up!!!

Could make out a case either way. Management should be commended for focussing on profit rather than revenue and growth elsewhere looks promising. Statement that "At this point, co-operation with this vendor in other regions will continue as planned, provided healthy margins are maintained" makes me uneasy. Will sit on the fence for the time being.

Partridge------- "At this point, co-operation with this vendor in other regions will continue as planned, provided healthy margins are maintained" I feel the opposite, at least it proves that LEAD will not do business at any cost, I imagine the vendors try and squeeze margins as much as they dare, similar to the supermarkets and their suppliers.
2517

Not wishing to appear to be clutching at straws but, would someone like Spirent be interested in LEAD.
2517

Pretty much as expected, and the move to working more closely with operators and less with vendors is good to see.

Debtors days have been reduced (on a comparitive basis), but have risen with the merging of the Ytel accounts into Leadcom, however they clearly state they will pull the ex-Ytel figures into line.

The expectation stated by Arik of finishing the year with 9.5% to 9.7% NOP (which currently stands for 9 months at 7.6%) means Q4 is going to have a significant positive weighting on the yearly figures.

Ericsson, Nokia, Alcatel and many others are squeezing margins, but so are operators and this is where the move by Leadcom to start competing with Ericsson, Nokia and Alcatel etc makes sense. Operators will be squeezing the vendors, and so if Leadcom can do the work for the vendors and make money, then they can do the work direct for the operators, at higher margin and the operator also gets better margins than taking on Nokia etc... so its a win/win for operator and supplier - but yes it will likely mean, if the trend spreads, that the installation side of the business for Ericsson, Nokia etc.. is going to post more woes in the future.

Working direct with operators also leads to more business on the support and service side.

The expansion into AP has led to lower operating margins as well, we have known this for some time, the company has clearly stated as such ahead of it happening, one can only assume that the India work was done mostly in Q3, and if Q4 is to weight full year NOP back up to 9.5%+ then its likely the Q4 work is of much higher margin.

A bit of a kitchen sink job this, as I have suggested in might be earlier. When you discount the geographical side (as in mostly India work in Q3 ?), and the CALA issues and look forward - there is plenty to be hopeful about.

I must admit to not realising how much the initial, if you like "promotional", work in India would be discounted. Although I always draw attention to how much promotional and marketing expenses effect profits, I overlooked that slightly here. When you try to break into new markets, you have to offer your services cheaper than the established, and once you become proven at what you can do, you can go about building margins up. India appear to be, to me, quite considerably lower margin in those initial contracts to get the Leadcom name known and proven - and now we can move on.

Anyway the overriding story is "its a one off quarter of bad news".

Pretty much as expected therefore since the RNS, and we have a kitchen sink job quarter, and CALA becomes discontinued and accounts are restated as such.

Q4 will be a good one, and raise NOP for the full year up to 9.5%+ levels is what is said - so there is something nicer to look forward to.

Will be listening to the webcast later with great interest.

2517.... Fair point and as a general principle I very much subscribe to the "sales are vanity, profits are sanity" school. What it does not say is how much of remaining sales are to the same customer. If relatively small, then no problem. I do not know the industry well enough to understand LEAD competitors and whether the historically healthy margins they have made elsewhere can be maintained.

After review I would suggest figures like this now (with 2007 being a kitchen sink job).


2007

Turnover $206 mill
Normalised operating profit 9.5% gives $19.57 mill
Exceptional $12 mil (3m+6m+spare 3m)
Tax of 31% of $7.57 mill
Net profit $5.22 mill
120 mill shares in issue

Exchange rate $2.08 to £1
EPS 4.35 Cents = 2.1p


2008

Turnover $320 mill
Normalised operating profit 10% gives $32 mill
Exceptional $4m
Tax of 29% of $28 mill
Net profit $19.88 mill
125 mill shares in issue (+5m over 2007 for safety)

Exchange rate $1.95 to 1
EPS 15.9 Cents = 8.15p

Hows that short coming along scotinvestor?

have reluctantly decided that, especially in the current climate, LEAD is going nowhere good in the near future so have cut my losses (caused by greed in the first place)

Probably will be a change of major shares ownership in the months ahead, then get what will be awful prelims out of the way - and then quickly move on to Q1 08 results.

If your on margin cynic, then getting out might be a wise choice. I am happy to hold through all of this, mid term things should be very positive, after short term wobbles subside.

i only deal in CFDs but was not under any pressure ..... just don't feel this stock is the place to be at the moment ..... in fact, am generally and gently reducing exposure in the markets as i feel there is an awful lot of nastiness to come

I posted my thoughts on 2007 and 2008 earnings earlier, and its copied below too. I am hoping now - given that nobody really cares anymore about 2007 results, that we get a good "kitchen sink" job at prelims, everything is written down or off and we move forward cleaner than clean into 2008, a year of outperformance.

The insti's buying in now know they will get a divi, so they will not care about this crappy 2007 year, they will be focussing on 2008 onwards, which so am I now.

Leadcom will likely get sleepy now until Q1 2008 results are out (hopefully the prelims will be awful in terms of exceptionals and we limit EPS to under 2.5p).

My estimates :

2007

Turnover $206 mill
Normalised operating profit 9.5% gives $19.57 mill
Exceptional $12 mil (3m+6m+spare 3m)
Tax of 31% of $7.57 mill
Net profit $5.22 mill
120 mill shares in issue

Exchange rate $2.08 to £1
EPS 4.35 Cents = 2.1p


2008

Turnover $320 mill
Normalised operating profit 10% gives $32 mill
Exceptional $4m
Tax of 29% of $28 mill
Net profit $19.88 mill
125 mill shares in issue (+5m over 2007 for safety)

Exchange rate $1.95 to 1
EPS 15.9 Cents = 8.15p

share similar view to Richard, and have sold @45p this am, now out, dont see any immediate rush to hold...

I've stayed in, just in profit, won't buy anymore as there are opportunities appearing in my favoured value area. At these lower levels any news of contract wins could move the LEAD sp up, I suspect there's more good news to come than bad. Says he with his fingers crossed.
2517

Put this on both LEAD and LONR threads, all good news to those exposed to growth in Africa, LONR a lot more than LEAD, but its all relative.


http://allafrica.com/stories/200711020807.html

Africa: Africa Must Invest More in Telecommunications

Highway Africa News Agency (Grahamstown)

2 November 2007 David Kezio-Musoke

The 'Connect Africa' Summit that took place from 29 - 31 October 2007 ended in Kigali, Rwanda with a commitment of US$55 billion to investment and trade in Africa's emerging economies.

The chief of media relations and public information of the International Telecommunications Union (ITU), Sanjay Acharya told Highway Africa News Agency (HANA), that the ICT industry takes the lead of those commitments.

Meanwhile, president Paul Kagame of Rwanda said during his closing remarks that investment and trade as opposed to aid and charity must drive the transformation of Africa's economies.

Kagame called for a dynamic ICT sector to connect Africa to the global information superhighway.

"In order to realize this much-needed economic revolution, we have to forge productive relationships between government and business," Kagame said.

The Connect Africa Summit decided to bring forward ICT connectivity goals to 2012 to enable the achievement of the broader Millennium Development Goals (MDGs) by 2015.

Commitments were made to interconnect all African capitals and major cities with ICT broadband infrastructure and strengthen connectivity to the rest of the world by 2012.

By 2015, broadband and ICT services will be extended to all African villages. The Summit also sets out to meet the World Summit on the Information Society goals for capacity building, establishing an enabling environment for investment, and e-government services.

The role of governments in setting a level playing field for industry to compete was also highlighted.

It was also decided to ensure harmonization of the regulatory framework to stimulate cross-border integration in large-scale projects. Capacity building was identified as one key area for cooperation among all stakeholders.

Africa's mobile market has been the fastest-growing of any region over the last five years, and has grown twice as fast as the global market. Mobile phones overtook fixed lines in 2001 and now outnumber fixed telephone lines by nearly seven to one, with nearly 193 million mobile cellular subscribers in 2006. This figure is projected to grow to more than 270 million by the end of this year.

Stepping in to consolidate the mobile revolution in Africa, mobile operators of the GSM Association announced USD 50 billion in new investment over the next 5 years to expand and upgrade networks across the continent by 2012. This would provide mobile coverage to more than 90 per cent of the population.

The European Commission announced support for trans-African networks that facilitate interconnectivity.

An EU Trust Fund for Africa of almost 100 million Euros in grants and some 260 million Euros for loans has been established along with the European Investment Bank and ten EU member states for the period 2007-2008.

The fund, which will be substantially replenished at the end of 2008, will finance cross-border projects or national projects with a regional and continental impact that would include ICT. The Commission also announced a contribution of Euro 6 Million to support ITU's regulatory reform initiatives in Africa.

Success in mobile penetration is now set to be emulated in broadband connectivity in Africa, with new investment projects for ICT infrastructure.

"Africa is open for business," said ITU Secretary-General Hamadoun Tour "We are looking for investment through win-win partnerships in a viable marketplace by an expanding ICT industry." He added that wealth creation is key to achieving the MDGs. "This new investment in ICT infrastructure will lead to new jobs and overall economic growth," said Dr Tour

The representative of the UN Secretary-General Ban Ki-moon, Mr Sha Zukang, Under-Secretary-General of the UN Department of Economic and Social Affairs, said that innovative ways were needed to extend the reach of ICT to the most remote corners of the continent.

"I am confident that with the entrepreneurial spirit of the African private sector working with their international partners, the support of the international community and the commitment from governments, universal connectivity in Africa is no longer a utopian dream," he said.

The World Bank Group announced that it expects to double its commitment to ICT in Africa to US$ 2 billion by 2012 from its current investment programme of US$ 1 billion over the last five years. The financing will continue to promote private sector participation.

The African Development Bank (AfDB) also scaled up its investments in infrastructure, and expects to invest 60 percent of its concessional resources on infrastructure, including ICT, in the next three years.

The Bank committed close to US$ 65 million to two key regional infrastructure projects including RASCOM and the EASSy submarine cable.

Over one thousand participants, including six Heads of State, took part in the Connect Africa Summit.

5 page article on Wimax, its competition and rollouts etc...


http://www.telecomasia.net/article.php?id_article=6276&page=1


Wimax struggles for its place in a post-3G world - again

Nov 09, 2007 By John Tanner and Chris Everett

The post-3G wars are well under way. The telecoms industry has set its sights on mobile broadband, which will be a $400 billion global market by 2012, according to Informa Telecoms & Media. And proprietary or market-specific technologies.........................

http://www.forbes.com/businesswire/feeds/businesswire/2007/11/13/businesswire20071112005828r1.html

Leadcom and Optibase Partner to Deliver Advanced End-To-End IPTV Solution in Kazakhstan

11.13.07, 1:29 AM ET


Optibase Ltd. (NASDAQ:OBAS), a leading provider of advanced digital video solutions and Leadcom Integrated Solutions Ltd. (AIM:LEAD), a leading international provider of innovative telecommunication solutions, announced today a strategic alliance to roll out integrated TV over IP services. The first project will be delivered to a leading Telco operator in the Republic of Kazakhstan.

Leadcom selected Optibase's pre-integrated, advanced IPTV platform in order to enhance its offering by adding high quality, broadcast TV and interactive IPTV services. The joint deployment in Kazakhstan includes Optibase's end-to-end IPTV solution consisting of Video on Demand (VOD), personal video recorder (PVR) services, middleware, set-top-boxes (STB) and the Optibase Media Gateway (MGW) carrier-grade H.264 encoding platform.

Countries such as Kazakhstan are experiencing strong growth due to new legislation and liberalization of the telecom sector. The IPTV solution provided by Optibase and Leadcom is ideally suited for this fast growing market, offering a state-of-the art system, which can be deployed both quickly and effectively.

Yoel Bar-Gil, Chief Technology Officer at Leadcom, said: "In this project, Leadcom is delivering a Triple-Play solution (IPTV, IP-phone & broad-band Internet access) to selected subscribers of the Telco operator. Optibase's IPTV solution allows Leadcom to provide its customers with a video over IP system that is efficient and easy to deploy. Furthermore, the Optibase solution provides Leadcom with an extensive offering of interactive and personalized features coupled with top video quality and low bit-rates. This creates a winning combination for our customers."

"Our partnership with Leadcom and the installation in Kazakhstan continue the Optibase momentum in the emerging Asian market:" said Udi Shani, Executive Vice President of Sales at Optibase. "This is based on the winning combination of Optibase's world-class integration, development and implementation services and Leadcom's vast experience in telecommunication networks and global presence, which together create a powerful IPTV solution."

About Leadcom

Leadcom Integrated Solutions Ltd. (Leadcom, AIM: LEAD), established in 1982, is an international leader in innovative telecommunications solutions. Incorporated in Israel, Leadcom was admitted to London's AIM market in April 2005. Operating in over 50 countries throughout the Americas, Europe, Africa and Asia, Leadcom delivers services in the supply, implementation and management of telecommunication network services and solutions. For further information, please visit http://www.leadcom-is.com

About Optibase

Optibase provides professional encoding, decoding, video server upload and streaming solutions for telecom operators, IPTV service providers, broadcasters and content creators. The company's platforms enable the creation, broadband streaming and playback of high quality digital video. Optibase breadth of product offerings are used in applications such as: video over DSL/Fiber networks (IPTV), post production for the broadcast and cables industries, video contribution over IP, archiving, high-end surveillance, education, and business television. Headquartered in Israel, Optibase operates through its fully owned subsidiary in Mountain View, California and offices in, Japan, China, India and Singapore. Optibase products are marketed in over 40 countries through a combination of direct sales, independent distributors, system integrators and OEM partners. For further information, please visit http://www.optibase.com

Given the earlier news of the Optibase tie up for IPTV and other advanced services in Khazakstan, interesting to see Optibase are busy in India too.

http://www.israel-times.com/business/2007/10/india-israeli-optibase-wins-additional-major-contract-for-its-iptv-solutions-3158/

INDIA - Israeli Optibase wins additional major contract for its IPTV solutions

Author: Victoria Stern - Thursday, October 11, 2007

Largest private broadband and telephone service provider in India, Bharti Airtel Broadband & Telephone Services (B&TS) plans to penetrate further the fast-growing IPTV market.

IPTV encoding platforms, or H.264 Media Gateway (MGW) 5100, have already revolutionized the local market just in two past years. The demand continues to climb up and new contracts are being signed. Thanks to Bharti Airtel new deployment, by the end of 2007 thousand of households in India will be able to enjoy new high-quality extensive video services.

Collaborating with three out of four leading IPTV Indian service providers, advanced IPTV encoding platforms by a tier one Telco operator, such as Bharti Airtel, represents an important business relationship for our company” underlined Companys Chief Financial Officer, Amir Phillips.