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".

found this on the iii BB...I hadn't realised that Pipex had so much potential to be a cash cow!!

Author The Orphan View Profile | Add to favourites | Ignore
Date posted today 11:52
Classification Comment
Subject: Re: Re: impressive results

Message
as a result of PXC's recent run of acquisitions they have built up c.100m of positive goodwill...

in the AAs they said they would amortise goodwill over 10yrs so we can expect a hit of 10m pa...

what is great about the Pipex business model is that it has a very low annual capex spend relative to it's peers, it has very little debt on the balance sheet and it has c.80m of tax losses to offset future profits...

all in all this makes me conclude that going forward the EBITDA figure for PXC will be close to the cash surplus generated for the year, deduct say 20% of EBITDA used for capex. This is very significant when you consider an appropriate valuation method for PXC.

It would be very easy to apply the average sector EBITDA multiple when trying to value Pipex....HOWEVER

I think this is wrong because you are not comparing like with like...for instance:-

THUS - c.85% of EBITDA is reinvested in capex
KCOM - c.75% of EBITDA is reinvested in capex
CTM - c.80% of EBITDA is reinvested in capex

In conclusion I think Pipex is all about becoming a cash generating machine going forward and to date the market hasn't quite managed to make this distinction between it and its peers yet....when it does I would expect to see PXC trading in the 14p-18p range, probably within the next 12 months.

A big trade 6,250,000 Looks like a sell.

Troys,

I doubt it....I was quoted 7.75p to sell 250,000

can't see MMs paying over the odds for this amount of stock

got to be a buy or some sort of rollover?

Mack1705

Lets hope so

Interesting link

http://www.theregister.com/2004/09/08/pipex_results/

A little disapointed today with share movement, mm's still in control

Moving down today, I guess thats the people hoping to make a quick buck jumping the boat... I aint to bothered, I am happy my money is safe in Pipex and I expect it to make its way higher sometime over the next few months, and over a few years we should do very well..

simonpaynton

I agree with you. tuck them away and watch them grow.

I'm not so sure that the mm's are in control. Its more like the boys from berlin:-http://www.fillyaboots.com/Frames/whatwe.html

yoyo,

Wendy is an intelligent comentator, I have had this debate about the Berlin exchange elsewhere, but in 'short' (pun intended) absolutely NO evidence of any such activity on pxc or any other UK stock has been presented, let alone validated..it is imho a complete piece of well researched nonsense (as far as UK stocks are concerned)...

I see no effect on pxc at all, and no evidence of any effect. I would love somebody to prove me wrong - but they can't. It is more likely that as the company has aquired businesses and issued stock that smaller holders are taking profits - for whatever reasons...in the longer term, tue value always comes rises to the surfaces eventually, I expect not only for this company to reach the 14p target in the BN, but to exceed it as peeps begin to understand the hidden goldmine in this company, i.e. SMB VOIP and Wi-max licences.

All imho, DYOR etc and all that BS.

regards to all..

T..

Troys

Yep, mine are tucked very nice in my pants, and they are staying there... :)

Tradx,

I hope you are right, It is interesting to note that Bioprogress sp has improved since taking steps to delist from Berlin. If Pipex do the same and the sp starts to move up then I guess we will know.

well, medium or long term, right now i feel gutted at 7.25 on no volume.

Yes, it's grim ! Need to hang on in there for the time being... this'll come good some time in the future but don't know when (imho)

simonpaynton

I Think they will be in your pants for a long time. but who will want them then ?

Troys
I like it..... ;o))

Thats a good point....

Maybe the mm's keep them in their pants also, which is why no one wants them.

Yep Troys, now it all makes sense.... I have to admit I half thought that we would not see much change whatever the results, and I still expect them to start moving up over the next few weeks, but todays drop is for sure a bit of a kick in the pants (and that is right where I keep my shares)

So.. we have lots of undiscovered gems in everybody's pants ! (see top post)