Tipped by the independent 2/01/2004

........."And so to our traditional "wild card". Pipex Communications, formerly known as GX Networks, is a telecoms company created by one of the entrepreneurs behind Ukbetting, Peter Dubens. It has been assembled from six smaller players. The ambitious company is generating cash for the first time but is still not widely followed in the City. It could be an undiscovered gem".

i hope there will be some bigger gains as the shares i sold in seo to buy this one has seen big gains in the last week should of kept them

Citywire tip Pipex Communications has made huge progress in the past year but the market does not yet seem to rate it as the serious telecoms and internet hosting player that it has become.

Turnover for the year to December grew to 102.3 million from 35.2 million, gross margins improved to 47.4% from 43.5%, profit before tax and amortisation was 6.2 million against losses last time of 7.2 million and before interest, tax, depreciation and amortisation (ebitda) earnings were 13.6 million against 3.1 million of losses. At year-end, the company had 11.3 million of cash, having become free cash flow positive for 2004.

The results are slightly ahead of expectations, and Pipex shares (PXC) are up 0.625p at 8p, valuing the business at just 17.8 million. We tipped them in August 2003 at 5.625p, and said add in January at 8.75p.

The whole strategy for building what was originally GX Networks, was to take advantage of a small window of opportunity that opened up in the post-2000 downturn, and to buy distressed businesses that had nevertheless spent a great deal of money on infrastructure. This was then supplemented with the acquisition of three successful businesses, Pipex, Host Europe, and in September last year, Nildram.

Chairman Peter Dubens told Citywire: It was very good to acquire the business when we did, in that two-year period. He said the company has slashed 20 million off its operating costs, which are now down to 38% of sales from 57%. There has been a big turnaround in 2004, Dubens said
The company has achieved this by gaining an increasing amount of its sales through its websites and by increasing staff productivity.

Pipex provides telecoms lines, broadband, web hosting, domain name registrations and services such as security. The main driver of growth is the dramatic increase in the number of transactions happening over the Internet. Companies are having to upgrade their networks, storage capacity and services to cope with the increase in their own customers transacting over the web.

As a demonstration of this, Dubens, who is also chairman of online gaming business ukbetting, said that ukbetting is now spending three times as much on connectivity as it was two years ago.

At the end of December, Pipex had 420,000 customers. It reckons it is the fifth largest supplier of broadband in the UK, with 192,000 customers at the end of December. The most profitable part of the business now is shared hosting, where several small companies or individuals have their websites hosted on a single server. Dubens said this is also the fastest growing area of the business, and in the longer term will be driven by consumers needing to store and back up their digital photos and music.

While hosting services got a bad name in the dotcom crash, with large hosting centres standing empty, Dubens said Pipex centres are running at 60% full. In Germany, where the company inherited a data centre through Host Europe, the centre is full and Pipex is looking to build another. The German business may not be viewed as core in the longer term, but for now Dubens said it is cash generative and doing very well.
The company recently launched voice-over-IP to its Nildram broadband users, and 20% of these customers are now taking voice services as well as broadband from the company.

It also owns one of two UK licences to the 3.6 - 4.2 GHz wireless spectrum, which now falls within the new WiMAX standard for wireless broadband. Pipex is going to start trials of wireless broadband, which should be able to deliver data at speeds of up to 2 megabytes per second, with a partner that makes wireless devices.

Dubens said this technology has huge potential. The WiMAX forums website talks about WiMAX technology being incorporated in notebook computers and PDAs in 2006, allowing for urban areas and cities to become MetroZones for portable outdoor broadband wireless access.

Citywire Verdict:
Investec has a note out today in which says that the business, trading on a multiple of 13.5 times December 05 earnings, is significantly undervalued and it has a buy recommendation on the shares.

Pipex main direct competitors are in Europe - United Internet in Germany and Illyad. Dubens reckons United Internet is valued at 20-25 times ebitda and 18-20 times cashflow.

In the UK, Plusnet, which offers only part of what Pipex does, is valued at 50 million, and Illyad, which does only hosting, is valued at 90 million.

The fact that Pipex has grown so rapidly by acquisition and that it now has three parts to its business may make it more difficult to value in the short-term, but there now seems no reason why it should not be re-rated. Holders should hold and new money should still have time to get in.

http://www.citywire.co.uk/Home/Home.aspx

Thanks Butane good info.
Will hold/ maybe add for the re-rating when it arrives.. wonder what pxc still has to do to get the city to warm to it ?

Another 18m shares and we might move again. This is hard work. LOL

It'll move further, just needs more time for the rating. A period of no acquisitions will help too (clearer picture for the doubters).

skids

Skids

Any idea how long we are looking at for a re-rating? Days,weeks, months?
I'm in for the long term. Just curious. LOL

Troys

Afternoon all,

Have been away since last year, so still catching up. Have been a long term holder of PXC for quite a while now, but one thing I have learnt about this company over the last two years or so, is that they are a solid growing company (proven by latest results) but I doubt if the SP will ever rocket in the same way as BPRG / ASC etc, too many shares in issue. Personally, for a long term hold, I prefer the steady approach, but it will be interesting to see if they become an aquisition themselves as opposed to a predator. Whatever the outcome, the future looks good.


Regards

PTH

http://www.britishbulls.com/StockPage.asp?CompanyTicker=PXC&MarketTicker=NON-CYCLICALS&Typ=S

http://www.britishbulls.com/StockPage.asp?CompanyTicker=PXC&MarketTicker=NON-CYCLICALS&Typ=S

Independent 12 April

The Investment Column: Web-savvy Pipex Communications is making all the right connections
12 April 2005


Pipex Communications is the country's fifth-largest supplier of broadband internet services and yesterday's annual results proved it is making all the right connections, with sales up from 35.2m in 2003 to 102.3 last year.

But while its 192,000 broadband customers at the end of last year is a big jump from 93,000 the year before, there is more to Pipex than just connecting consumers to the worldwide web.

It has a website and data-hosting business as well that is delivering strong organic growth, boosted by the increasing use of off-site servers for storing documents. It also has a network operation that supplies telecoms services to business customers that is set to turn profitable this year, with 5.6m of new orders booked in the first quarter of the new financial year.

So Pipex is, in reality, a mini-telecoms conglomerate with a 162m market value. It has gone from a loss of 7.2m in 2003 to a pre-tax profits of 6.2m in 2004, with cash on the balance sheet at the end of last year of 11.3m. It has improved its margins as well, with the gross figure up from 43.5 per cent to 47.4 per cent in 2004.

The momentum in broadband connections in the UK, Pipex's core business, is being driven by high-profile campaigns by the likes of BT Group and the Cable & Wireless-owned Bulldog Communications, but smaller operators such as Pipex are cashing-in as well.

About half of UK households have an internet connection but new, high-speed broadband connections are only a small proportion of them. This will grow considerably in the next five to 10 years.

So everything seems set fair, except for the share price that has largely been disappointing since the company floated in 2000, even allowing for the technology bubble bursting.

But like many conglomerates before it - big or small - Pipex may well be suffering from a classic conglomerate discount to its true valuation.

Its rival PlusNet, for instance, has sales of just 54m but specialises in broadband connections. Iomart has sales of 7m but focuses on web-hosting and related areas. Together theyhave a market value of 150m, compared with Pipex's 162m, even though Pipex dwarfs them in terms of sales and profits.

There is strong evidence that Pipex is undervalued. Looking ahead, the company is expecting growth from increasingly popular, bundled services of voice and broadband internet. It also owns a licence for wireless broadband services that it will be testing in the this year, which could be an exciting source of growth for the company. Buy.
12 April 2005 08:15

Tuesday tips round-up: Allied Domecq, Venture Production, Pipex 12/04/2005 7:40:00 AM

LONDON (ShareCast) - A bid at 675p from Pernod for Allied Domecq would be 66% above the average share price for the past five years and nearly double the ten-year average, says the Times.

It would also represent a chunky earnings multiple of 18 times, where the five and ten-year average historic price-earnings ratio for Allied is thirteen.

Given that the risks that Pernod decides the price is too rich or that competition authorities throw a spanner in the works, investors should lock in profits on at least a part of their holdings by selling in the market now.

Venture Production, the oil and gas producer, presented an encouraging picture yesterday, says teh Times. Venture's promise to more than double production, coupled with the likelihood of higher realised oil prices, means further progress can be expected. Buy.

The shares are trading on 7 times 2005 earnings added the Telegraph. For investors happy to take a risk, Venture shares are a buy.

Telecoms group Pipex's results suggest it is firing on all cylinders says the Times. Turnover all but tripled in the year to December 31 and a loss of 3.6m last time was translated into a profit of 13m this time.

Acquisitions helped, however and there is also a risk that broadband telecoms price deflation will hobble the company, but Pipex has an interesting franchise and though risky, the shares are worth buying.

The Independent adds that Pipex is expecting growth from increasingly popular, bundled services of voice and broadband internet. It also owns a licence for wireless broadband services. Buy.

UBS AG (EMM)
12 April 2005

FORM SAR 3

Lodge with a RIS or Newstrack, if appropriate, and the Takeover Panel. A copy
must also be sent to the company the shares of which are acquired.

Date of disclosure...12th April 2005

DISCLOSURE UNDER RULE 3 OF THE RULES GOVERNING SUBSTANTIAL ACQUISITIONS OF
SHARES ('SARs')



Date of acquisition ...08 April 2005..........................................

Acquisition in .........Pipex Communications Plc Ord 1P........................
......


(1) Class of voting shares Number of shares/rights over shares If rights over shares acquired,
acquired as opposed to the shares
(eg ordinary shares) themselves, specify nature of
rights



.............. ................
...
5,000,000..... shares
.........Ordinary ..........


............... ..rights








(2) Resultant total holding of Resultant total holding of rights Total percentage
voting shares (and % of total voting over shares (and % of total voting
shares in issue) shares in issue)



391,950,180 ( 18.09 %) ....... 391,950,180 ( 18.09 %)

18.09%





(3) Party making disclosure ......UBS AG LONDON BRANCH........................
..................



(4) (a) Name of person acquiring shares or rights over shares ......UBS AG
LONDON BRANCH............................

and, if different, beneficial owner ...........................
....................................................



(b) Names of any other persons acting by

agreement or understanding ............... ....................
...................................................



Signed, for and on behalf of the party named in (3) above .....................
........................................



(Also print name of signatory) ...Philip Ingram Neville Hall...............
.............



Telephone and extension number Angela Huff 0207 568 4981.....................
..............................

______________________________________

Note 1. Under SAR 5, the holdings of and acquisitions by persons acting by
agreement or understanding must be aggregated and treated as a holding of or
acquisition by one person. Note 3 on SAR 5 requires persons who must aggregate
holdings to disclose certain disposals.

Note 2. The resultant total percentage holding of voting shares and rights
over shares is to be calculated by reference to the percentage held and in issue
outside treasury.

For full details of the SARs disclosure requirements, see Rules 3 and 5 of the
SARs. If in doubt, contact the Panel on Takeovers and Mergers, Monitoring
Section, Tel. No: 020 7638 0129.
E-mail:
monitoring@disclosure.org.uk




This information is provided by RNS
The company news service from the London Stock Exchange

18% of the company. Somebody likes PXC

somebody is looking to take it over...

Pipex Communications PLC
12 April 2005

PIPEX Communications plc
Grant of Options


PIPEX Communications plc (LSE: PXC.L), the telecoms network operator and
provider of business broadband solutions, announces that on 11th April 2005 the
executive directors were each granted options over the Ordinary Shares of 1p
each.


The options will be exercisable if the market value of an ordinary share in the
Company is 12p or higher at the date of exercise, or in the event that change of
control provisions apply. The number of options granted at the option price of
7.5p per share and the total number of options held by each director following
the award is shown below:


Executive Director Options granted Total options
on 11th April 2005 held on 11th
April 2005

Peter Dubens 3,333,333 13,333,333
Mike Read 2,933,333 14,183,333
Stewart Porter 2,333,333 36,016,046



-ends-


For further information contact:



PIPEX Communications plc
Stewart Porter Tel: 020 8957 1180
Finance Director

Financial Dynamics
Edward Bridges / Juliet Clarke Tel: 020 7831 3113






This information is provided by RNS
The company news service from the London Stock Exchange

Is that the last of the sells?

http://news.bbc.co.uk/1/hi/technology/4436327.stm

This has got to be a worry. I use Pipex and it costs me 24.44 for a 512Mb connection where as this one is 9.99. I will be switching when my deal runs out.

Do you get any additional services with that 9.99, web space, hosting, etc?

Pipex have never been the cheapest, but they have good service and do things right first time (in my experience, unlike some of the others).

Price isn't everything. 2 customers at 25 is still more than 4 at 9.99!!!

skids

No worry Captain. Hope you live in the right area for your switch. And in any case, PXC can deal with it - by acquisition if necessary!


Pipex does much more than broadband for home users (although it does that very well).

20% of customers come from the business sector, 154,000 from hosting, and 2,000 corporate customers using the network services.

Nildram acquired – 35000 broadband users added, 30% business users

Host Europe Acquired – 3rd largest hosting provider in Europe and the largest provider to the UK SME market.


Diverse Business Model PIPEX is not a single product company and
has grown into an integrated telecoms business. The Company has recognised that broadband is merely an enabler and that the business will be sustained through the delivery of value-added services. It is split into three segments:
ISP – The Group owns and manages a network that has 100 Points of Presence (PoPs) in the UK and is able to provide Virtual Private Networking (VPN) and Internet Connectivity. PIPEX aims to minimise downtime and maximise performance on its network, with a focus on scalability, resilience and reliability. It occupies three locations in London Docklandsfrom which it is connected to other ISPs via the London Internet Exchange (LINK) or other Internet transit providers overseas.

Hosting – PIPEX offers a number of internet hosting solutions ranging from up to 5 Gigabytes of disk space on shared server, to up to 360 Gigabytes of space on a server dedicated for customer use. Colocation and disaster recovery is also available for customers who wish to source their own server for PIPEX to connect to the internet, from one of its Data Centres.

Managed Services – PIPEX aims to use manage services to tie customers to its
business and protect its revenues into the future. This arm provides services such as firewall, anti-virus and anti-spam protection, web traffic monitoring, and encryption services to allow customers to share sensitive
data over a network.

WiMax Opportunity PIPEX is also a well positioned player in the
emerging WiMAX market. WiMAX is the name given to the IEEE 802.16 wireless
communications standard. It supports very high bit rates for uploading and downloading from a base station up to a distance of 30 miles and can be used for standard Internet connectivity as well as VoIP (Voice over IP)
and data and video.

Following the acquisition of Firstnet, PIPEX owns a permanent right to use
spectrum ranges 3.6GHz to 4.2GHz and 28GHz, and is examining its options for
exploiting these. Broker CSFB reports that PIPEX is in negotiation with potential partners to build a UK WiMAX network, and sees itself in a strong position, with Intel planning to develop the technology in Europe at the 3.6Ghz spectrum band.

And of course Pipex is likely eventually to become a desirable target for very large players.

IC, The Times, The Independent all rate as a buy. Long term hold of course.