12 month price target 167p based on the new business likeley to be generated by rolling out their smart card offering also good management

a little upward movement has the tip got out ? or been duplicated by another tipster?

From UK Analyst.


Buy Conister Trust at 75p
Says Tom Winnifrith of t1ps.com
To catch Tom's next red hot tip TODAY - click here!

Conister Trust (CTU) has been running a sleepy car finance business on the Isle of man for years. It is a solid enterprise but - for obvious reasons - it has minimal growth potential. But in May of 2006 financier Jim Mellon invested 5.4 million buying new shares in Conister and taking a 29% stake. Mellon has brought in a dynamic new CEO, Jerry Linehan who is heavily experienced in financial services and Linehan is about to set this company on fire.

The Business Now

There are four parts to this business of which the first is a cash pile of 10 million. That limits the downside risk.

The second is the legacy car finance business. It is boring but, operating only on the Isle of man, it is safe enough. last year it achieved sales of c4 million and made an operating profit of 200,000. This year it will do the same again. Next year it will do the same again. Do you get the picture? This is not an exciting business but at least it covers 40% of the entire central corporate overhead of around 500,000 per annum.

The third leg is actually dormant. Conister has an Isle of Man banking license. With so many affluent tax avoiders on the Island this could be a useful avenue for future growth but for the time being it can be ignored.

What is so sexy is Mellon's new business - prepaid cards. These are credit cards which allow those without bank accounts to insert cash on and which can then be used like any normal debit card. Critically you can also have two cards on an account so my Polish cleaner Barbara can now top up her card here allowing her ageing mother in Poland to take out cash there with no transactional charges just a very competitive forex rate. In the US pre-paid cards are enormous and in Europe they are catching on.


Conister reckons that each card issued will net it around W10. Of this a third goes to the company that handles all card transactions and a third will go to the distribution partners who Conister is signing up to mass market these products. Additional income is earned (and split in similar ways) on each transaction (either putting cash on the card or taking it off) and the cost per transaction is about 1.20 There is also a tiny margin made on each forex transaction and Conister picks up all of the interest on cash balances on the card. I am lead to believe that customers typically make around 5 transactions a month.


This part of the business will be launched in March so what take-up will be is anyone's guess. But Conister is already signing up distribution partners, notably a large mobile phone company and its big push will be in the UK migrant worker market -n a part of the population which is largely outside the reach of normal banking services.

Meeting up with Linehan the other day he seemed relaxed with the idea that he could build up to 100,000 customers within a year of launch and perhaps 300,000 within two years. The man has done his market research, he knows this industry and so he may well be right but there is an obvious risk.

Forecasts & Valuation

If Linehan is correct my spreadsheets suggest that this operation could clear for Conister a gross profit of 1.8 million in the first year soaring to 6.6 million in year two, assuming that customer numbers reach 100,000 after 12 months and 300,000 after 24 months and that card usage rates are as stated. Since Conister will have an effective nil tax rate that means that even after absorbing half of the central corporate overhead it would be making a post tax profit of 1.5 million in year one and 6.3 million in year two. For a business which (ex-cash) is being valued at 21 million that is pretty good going.

What, you may say, happens if sales targets are missed. Just to check out I ran a model where sales of cards are only 1/6 of what the company hopes for. Even so this business would still record a year one pre-tax profit of 300,000 rising to 1.1 million in year two and to more than 2 million in year three.

Conister runs a calendar year so last year's numbers will not reflect any of this excitement and I'd expect a calendar 2006 loss of around 500,000. Frankly I do not care. This year will enjoy nine months of the Prepaid cards business and if my assumptions are correct that should see the group making an operating profit from cards plus cars minus central costs of 700,000. I shall ignore interest income which should be at least another 500,000 on top.

For calendar 2008 we could expect to see operating profits on the same basis clearing 3 million.

In terms of valuation, if one strips out cash the underlying businesses are, with the shares at 75p, being valued at just 21 million which on my numbers is a 2008 earnings multiple of 7, falling to - perhaps - 3.5. If Conister delivers the sort of growth Mellon hopes for then this business will be valued on, perhaps, 20 times earnings which would imply a one year out valuation of 70 million for the entire group (or 167p per share) and that would just be for starters. Operational gearing means that if this business works, its profits will race ahead in years three, for and five.

If take-up is much slower than anticipated I have still demonstrated that this will be a business recording a small profit and sitting on a cash hoard. With Mellon on board that has to limit the downside. On a risk reward basis Conister is very attractive indeed and at 75p my stance is "speculative buy" with a 90p limit buying price and a one year target of 167p.


Key Data

Market: AIM
EPIC: CTU
Spread: 74 -77p

Not so sure about the header on this thread Gordon but I believe this one could be a very solid play over the next few years, Mellon aboard with a 29% stake and a new CEO who as a good reputation. As a banking license aswell and 10 million cash underpinning it (1/3rd of the market cap) and no tax to pay.

I can see big developments here being built on top of the old business.

Bought a sizeable amount over the last 3 days and expecting big things.

This RNS more or less sums up which direction the new business will take.....

Conister Trust PLC
10 January 2007


Conister Trust PLC

10 January 2007


Conister announces the launch of two new strategic initiatives


Conister Trust PLC (AIM:CTU), an independent Bank based in the Isle of Man today
announces the launch of a new business division, TransBank, to issue prepaid
cards globally and a ground breaking Mobile-commerce initiative in partnership
with BSG Clearing Solutions (BSG), a subsidiary of Billing Services Group
Limited (AIM:BILL), a clearing and settlement provider for the telecom industry.

Launch of new business division TransBank to issue prepaid cards


The directors of Conister Trust are pleased to announce the launch of a new
business division, TransBank, for issuing 'white-labelled' prepaid cards. This
is in line with Conister's strategy of progressively repositioning itself to
focus on a number of E-commerce banking opportunities as referred to in the last
Interim Statement.

Prepaid cards are forecast to be one of Europe's fastest-growing markets, based
on September 2006 projections by market research firm PSE Consulting. 'Between
now and 2010, the European market for such cards is expected to more than double
each year with 360 million prepaid cards in issue and where this market alone is
projected to involve transactions worth 75 billion annually.' These figures
come in the wake of prepaid cards already having created a tremendous success
story in the US, Australia and Italy.

In the USA, the smaller, independent banks have captured the majority of the
growth of the prepaid card market and that experience is anticipated to be
mirrored in Europe. Conister has positioned itself to take advantage of these
opportunities. Conister is already a member of the MasterCardTM network and
expects to have Visa membership in early 2007. Prepaid cards issued by TransBank
will be 'network-branded, open-loop', offering the broadest spectrum of
functionality available to the industry today.

TransBank prepaid cards will enable customers to:-

buy and pay for goods in any shop that accepts MasterCardTM
withdraw cash at any ATM that accepts MasterCardTM
check the account status and recent transactions online
electronically transfer money to another TransBank card anywhere in the
world
make mobile phone top-ups
hold a card in one of 3 major currencies - or US$ or
reload the prepaid card's balance by paying in cash at various local
outlets

TransBank will be issuing cards branded for partners that have significant
distribution channels and the first prepaid cards issue is expected to be
launched in late January 2007.

Another large market for prepaid cards is the growing sector of migrant workers
- 190 million globally (Source: US Department of State), most of whom are
excluded from conventional banking services. One of the clients TransBank is
partnering with is a World Bank sponsored initiative to develop global migrant
workers cooperatives.

The expansion into the prepaid card market is an international addition to the
existing business of the Company as Conister Trust continues to serve the Isle
of Man community with financial services. As one of the world's leading
E-commerce locations, Conister views the Isle of Man as the ideal base for
turning TransBank into a globally recognised issuer of prepaid cards


Conister Trust PLC and Billing Services Group in ground breaking Mobile-commerce
initiative

Conister Trust and Billing Services Group have entered into a partnership to
jointly trial and market a solution for mobile operators to provide customers
with prepaid accounts which will allow them to spend and transfer money using a
debit card, a mobile phone or the Internet. The service will be especially
suitable to those mobile phone users with needs outside the scope of the retail
banking sector, such as parents transferring spending money to their children,
without the risks associated with cash or credit cards or migrant workers who
send funds 'home' on a regular basis. Latest estimates are that migrant workers
repatriate $300bn funds annually (Source: World Bank).

Conister, through its TransBank division, will manage banking services including
debit card issue and regulatory affairs. Billing Services Group will manage the
transaction processing in addition to the financial clearing and settlement
between mobile operators and retailers.

'The partnership with Billing Services Group marks a new stage in Conister's
business development. It allows us to claim a place at the forefront of the
market for prepaid Mobile-commerce accounts', commented Jerry Linehan, CEO of
Conister. 'We will be able to address the prepaid card market and in particular
the needs of migrant workers through mobile operators, harnessing their
technology and high brand value to provide a very competitive offer.'

'A key business goal for the mobile sector is to increase the proportion of
revenue earned from data services, including mobile commerce,' commented Randall
Brouckman, Chief Executive Officer of Billing Services Group. 'This service will
provide operators with a single, simple entry point into that mobile commerce
market.'

Jerry Linehan commented further, 'The key strengths of this partnership are
Conister's know-how from 70 years in the banking industry and Billing Services
Group's technical capability and strong customer relationships among mobile
operators.'


About Conister Trust PLC

Conister is a Licensed Deposit taker and Regulated Bank that has provided
personal finance in the Isle of Man and the UK for over 70 years. Conister have
now launched a new business division to issue prepaid cards, a market that
offers tremendous growth potential. Conister will be operating in this market on
a Business to Business basis.

Conister is a Company which is publicly traded on the London Stock Exchange
(AIM) under the ticker symbol CTU. For more information visit
www.conistertrust.com.

May aswell have a chart up and TA...

All you want to know about pre-paid credit cards...

What is a Prepaid Credit Card?

The definition of a prepaid credit card is: A payment card (usually MasterCard, Maestro, Visa Electron or Amex), pre-loaded with your own money, which you can then use wherever the payment card is accepted, including on the internet and abroad.

A prepaid card is much like the gift cards available from most high street chains in the UK, however, prepaid cards have a much wider acceptance, and can be used internationally. They are the same as credit cards, but without the credit. The majority of UK prepaid card providers offer cards embossed with your own name, and some are even CHIP & PIN cards.

Qualifying for a Prepaid Card

A prepaid card is not a credit facility, so you do not need to pass a credit check. Even if you have bad credit or CCJs you are guaranteed to be approved for a prepaid card. However, like most Money products, you are still required to provide details verifying your identity and address (for example a passport, driving licence or national identity card + utility bill or an official letter with your permanent or temporary UK address). Some of the UK prepaid card issuers will even verify your details online, and give you an instant approval. This is an electronic identity check, not a credit check!.

Prepaid Card Convenience

Prepaid cards do not get you into debt, as only transactions up to the balance loaded onto the prepaid account will be authorised. Therefore, you can only spend what you have paid in! Most prepaid card providers enable you to manage your account online or via an interactive Voice Response telephone service. So, you are always within easy reach of your balance.

As its your own money, and not credit, there are no interest charges, late payment or over limit fees. In actual fact, you dont even need to be 18 to apply for one!

You are in complete control of your funds, and do not need to carry around large sums of cash! In most cases, if your card gets lost or stolen, your remaining balance will be transferred across to a new account, and you will receive a replacement card.

The internet great discounts

Prepaid cards are widely accepted across the internet. They are issued under a MasterCard, Visa Electron, Maestro or Amex badge, and therefore have the same acceptance as credit and debit cards.

So, rather than paying cash in the high street, you can get some great deals online, and save s. Goods and services are usually much cheaper online, so you can grab some bargains using your chosen pre-paid card.

You can also use a prepaid card to register for services such as Ebay or Paypal. You can then grab even better deals, and pay via Paypal immediately. This replaces the need to send cash, cheques or postal orders, which can add another 7-10 days before you receive your goods.

One prepaid card issuer even provides you with purchase protection, so you get to enjoy the same benefits as a credit card holder!

Financial planning

You are in complete control of the funds that you load onto the card. You can even get authorised users added to your account with most of the UK prepaid banks, and they each get their own card in their own name. You can only spend what you have paid in, and you can look at your transaction history 24 hours a day via the internet or telephone, with most of the banks.

Some of the card issuers enable to you set-up pay as you go prepaid accounts. You are not going to earn interest on your money, but it provides a great way of storing up some emergency funds, or just left over cash for a rainy day!

THE MARKET CONISTER IS TARGETING.

Prepaid Money Transfers

Prepaid credit cards The new way to do international money transfers. Send money overseas quickly and economically!


Prepaid cards can be a great cost effective way of transferring money overseas. Its simple to add an additional card to your selected prepaid account, which may be sent to a relative or friend outside of the UK. The account can then be re-loaded with cash in the UK (via the Post Office for example), and funds can be withdrawn instantly abroad, in the local currency. ATM and foreign transaction fees apply, but depending on the transfer amount, its likely to be quicker and cheaper than most mainstream money transfer services!

http://www.which-prepaid-card.co.uk/features/prepaid-money-transfers.html

This should area of money transfer should provide Conister with an emerging relatively untapped market in the UK and Europe.

Gordon says tips have ...

12 month price target 167p based on the new business likeley to be generated by rolling out their smart card offering........ NICE.

Better get this out of the way before someone querys it..

The Company has received a petition from a minority shareholder alleging certain
irregularities in relation to the issue of 12 million ordinary shares in May
2006. The Board have taken legal advice and firmly believe that the petition
is wholly without merit and will defend such action accordingly.

ENDS

Spoke to the company and they reiterate the above.

From UK analyst...

If Conister delivers the sort of growth Mellon hopes for then this business will be valued on, perhaps, 20 times earnings which would imply a one year out valuation of 70 million for the entire group (or 167p per share) and that would just be for starters. Operational gearing means that if this business works, its profits will race ahead in years three, four and five

few small trades today would like to see some momentum and await first lot of news in March perhaps ??

glad to see you on board GF you still doing o.k ?

I've been dissalusioned with stocks last 12-18 months been in overseas property
in Morocco check it out @ www.allnewmorocco.co.uk

if anyone wants any background of the CEO Jim Mellon read his book

http://www.amazon.co.uk/Wake-Up-Survive-Prosper-Economic/dp/1841126918/ref=sr_1_1/203-5676985-6598361?ie=UTF8&s=books&qid=1172836776&sr=1-1

Hi Gordon doing very well mate thans for asking, I think this one will get your enthusiasm back on track for stocks, pecker up I say.

Looks to be a real corker of a rejig, rejuvenation. 10 million cash underpinning it aswell.

Strong balance sheet but looks like the old business will turn in a loss, this year but who cares with all this new business going on.

High margins aswell I hear.

Mellon as a fantastic track record.

trouble is this stock needs exposure, i'd never heard of it B4 but it's been around for ever.....
where is this going to come from ? TW?

Yep from TW and then the city will catch on, no probs.

Must admit the name doesnt do it any favours, most people will think its a unit or investment trust.

I can see this being changed in time with a lot more awareness for the business.

Nice to se the buyers still coming in, cant bee long before it ticks up again.

Prepaid cards are forecast to be one of Europe's fastest-growing markets, based
on September 2006 projections by market research firm PSE Consulting. 'Between
now and 2010, the European market for such cards is expected to more than double
each year with 360 million prepaid cards in issue and where this market alone is
projected to involve transactions worth 75 billion annually.' These figures
come in the wake of prepaid cards already having created a tremendous success
story in the US, Australia and Italy.

I asked TW to see if they can get them to Master Investor I think they could be a late entrant which would give them great exposure

Excelent thinking Gordon.

Would be great to get to the show but Im booked up fully that weekend.

From the recent RNS...


Prepaid cards are forecast to be one of Europe's fastest-growing markets, based
on September 2006 projections by market research firm PSE Consulting. 'Between
now and 2010, the European market for such cards is expected to more than double
each year with 360 million prepaid cards in issue and where this market alone is
projected to involve transactions worth 75 billion annually.' These figures
come in the wake of prepaid cards already having created a tremendous success
story in the US, Australia and Italy.

Read the full PSE Consulting Document here...

http://www.psel.co.uk/pdf/articles/cardproducts/pse_prepaid_who_will_win_v2_sep_2006.pdf

Pre-paid cards tipped for growth in Europe

European consumers are set to spend EUR75 billion by 2010 using reloadable pre-paid cards, which are targeted at customers that do not have a bank account.

According to a report by European payment consultancy PSE Consulting, stored value cards are expected to account for 2.3 billion card transactions per annum by 2010 - compared with 150 million transactions now - representing five per cent of total card transaction volumes and three per cent of total card spending.


PSE says annual growth rates of the prepaid card market will exceed 110% for the next five years, and pre-paid gift products - such as card-based gift vouchers - will fuel a significant proportion (almost 30%) of total spend.


The use of the cards as an alternative to travellers cheques and foreign cash will also drive growth and account for 15% of spending. Internet payment cards (which provide a secure alternative to credit cards) are expected to generate 13% of spending, while company rewards and incentives programmes are set to account for 12% of spending.


But despite the anticipated rate of growth, Peter Jones, managing director of PSE, says banks must act quickly if they are to secure their share of the pre-paid market and compete with non-banks.


"We have forecast that 58% of spend will occur on Visa or MasterCard branded cards but, to date, banks and financial institutions have been adopting a 'wait and see' strategy," he says.


Jones says this is illustrated by Poste Italiane in Italy which currently has 1.9 million pre-paid cards in circulation.


The research found three separate segments are set to become the focus for pre-paid market development - stored value gift cards, direct financial institution offers including cards used for Internet payments, online gaming, travel cards or remittance products and business solutions such as cards for delivering government benefits and payroll.


As part of the research PSE carried out a mystery shopper survey using several different pre-paid travel products and those targeted at the un-banked which found that the registration of some products was very complex and may deter customers.


Chris Jones, senior consultant at PSE, says: "The sector must focus on developing and delivering simpler, cheaper products and services if the forecast levels of growth are to be achieved. The issues associated with directly charging consumers for pre-paid services mean corporate pre-paid solutions are likely to offer more attractive revenue models in the short term."