Some good news at last from this weeks Shares mag. Tim Freeborn revisits the company and altho no firm details are given about new deals he says they will be announced this quarter. I would think that this could be at the same time as the interim results are announced. I for one will be holding on cos they will fly sooner rather than later! ( 8.30% up today!)

jonny

Like you, I will be watching with interest to see how much revenue Cunningham is claiming on the full year results. If it is greater than 1.5m then we should look long and hard at the figures because this will not ring true.

Cunningham is now in the last chance saloon and he will no doubt be looking out for no. 1. As you say, he will be trying to raise cash and the inference is that he will be looking for private money. I'm presuming that the trading update is not audited and therefore it would be probable that any revenue figures posted will be 'amended' once an audited financial statement is issued. This is standard practice of course but just how much they will be amended - and for what reasons - will be interesting to see. A private investor would be very brave to invest in earthport if revenues are between 1m and 1.5 as expected (by me) because the company cannot survive with such low revenues and totally disproportionate cost base.

I'm actually surprised that Cunningham is going ahead with the trading update.

You and I could have got it wrong of course but I doubt it.

Regards

(All in my most humble opinion of course)

Been on the road for the day so fascinated to see the hornet's nest stirred up. My concern is that there is something like a lemming-style rush for the exit; if so why now? Three points:
1) Understandably Shares Magazine has lost patience. They must value their readers (!) and are clearly angry themselves at putting out comment on a trading statement which had not in fact appeared. However, I question the logic for changing their advice from Hold on this basis. It is clear that the trading statement will be positive, although I agree that it needs to be read with caution, but it makes more sense to hold until it arrives.
2) The price was marked down, ascribed to the Shares Magazine advice. However, the trading voume was evenly matched between buys and sells. The 3.7M sales were spread over about 40 sales of average 100,000 each or some 1100. The 3.6M buys were dominated by purchases of 2million and 750,000. There is no rush for the exit by larger holders. The volumes hardly warrant the change in share price; expect the MMs expected greater volume so marked the price down.
3) dvarcher puts the discussion on a more sensible basis. Interim revenue was 416K so his range of revenues (1M to 1.5M) seems reasonable, possibly nearer the latter with additional revenue lines coming on stream. Interim pre-tax loss was 2.81M but this was sharply down. It would not be surprising if there was further fund-raising, although a share placing is now not an attractive route. I think the key factor is the institutional view of revenue and profit projections; this is probably tied in with their view of the credibility of the directors. The interim statement was impressive - the view on this bb is that it was over-cooked. However, the technology appeared extremely impressive (unique?) and the client list includes important players.

Conclusion? Hold until the trading statement. Little point in selling at this level. Market capitalisation is down to 8million. What is value of technology to other players? The Hong Kong contract alone was claimed to be worth far more than that (I accept speed of roll-out was and maybe still is uncertain). Can we have views on this bb on the trading statement which are as objective as possible? (I accept a hard ask!) I suspect that 'this may be the darkest hour' and the conclusion may well be Buy.

I agree lets wait until Monday to see what they say it could well be a Buy !!
It would help also if the Directors put there money where there mouth is and make a substantail Investment in the company so to restore our faith.
Share prices only go up if there is good news.
Been no good news for months hence crappy share price.

EWRobson,

Another excellent well-measured post!! But (to my mind at least) partly based on some inaccuracies;- Shares Magazine did not put the Sell recommendation out just because of the lack of a trading statement. They said

..But it is impossible to keep supporting a company that fails repeatedly to turn forecasts into reality. .

They took this stance because of a stream of information they have been given by the company has subsequently been shown to be completely unsubstantiated e.g. The UK Post Office deal (told to them that it had been completed in January/Feb) and only awaiting Cabinet Approval, I can tell you factually that I have spoken directly to contacts at the post office and NO SUCH deal has EVER been done. The litany of other info which proved to be inaccurate is on this thread (and others) for all to see/read.

A shareholder here, recorded a conversation with the CEO. This poster maintains that he had been lied to about a US deal (remember the interims said that a deal had been all but done in the US). There are so many other examples of inaccuracies and inconsistencies you could in the short time I have been watching/investigating this company write a book which I suspect would make compelling reading!!

I'm also amazed how calmly holders/posters seem to be accepting that previous assurances about not needing further funding are now seen to be so obviously wrong. Clearly, this shows that he/the board/both have (at best) been extremely over optimistic. This, along with other information brought to light here must mean as Executives their professional judgment must be questioned.

If you are not able to, or cannot deliver on your promises, then the least you should do is to stop setting expectations to be judged against, most especially if you are briefing the press!

As I have said before, they must learn to stop over-promising and under-delivering, until then, precisely as share magazine is suggesting their public credibility and believability will be continually questioned.

Surely, they must realise that investors asking these questions are a consequence of their inability to deliver on their guidance, not the cause of it?

If the trading statement that comes out today or Monday is more fluff than substance (like the notes/promises in the interims simply compare them to the reality of their public position) but is closer to the 4.2 million revenue expectation than some other figures that have been mentioned here, then they might just be able to redeem themselves.

Of course, it should also offer some explanation of what has happened to the blue-chip deals they talked so confidently about, their very credibility in investors eyes demands this as a bare minimum!

As for the technology, it does read as if it impressive, but thats pointless if the company is unable to consistently sell it for a profit and to now generate substantial revenues, it is beginning to look questionable after all this time if a sustainable market exists for its offerings.

Based on the interims and projecting them forward, I maintain that break-even for this company is somewhere between 5-6 million of annual revenue, which suggests at the current rate they will need at least a further 4-6 million of funding to get there, Im sure you can work out the dilution effect assuming this is accurate. Therefore the realistic short term outlook for the share price must be no higher than it is now, and in all likelihood probably lower.

How they can persuade any more investors to put in further funding based on the apparent track record of this executive is simply beyond me, I cannot see how they will manage to raise a single penny from normal city sources.. if nothing else, you have got to take your hat off to them! They obviously know how to spin a great yarn.

Conclusion?

Yes, hold until the trading statement, but then cast a very critical eye over what you are reading and understand that no professional advisor will have checked the figures for accuracy; the Nomads responsibility here is (from anything I can read) vague to say the least.

Remember, the COO/Director has resigned and they have still not officially told the market! Ive lost count, but how many is that now they have lost now? (Again, Im not sure what the AIM rules are about announcing this type of news to the market, but I cannot see how this cannot be a material news issue).

So, to borrow a phrase from a respected poster elsewhere,

Caveat Emptor!!!

As always, DYOR all IMHO and that entire BS!

Tradx.

Thank you. Well argued and reasonable. We await with some hope.When you take a punts on small caps, they are just punts however well informed you think you are and sometimes they don't live up to expectations.

Tradx - 20 Aug'04 - 08:55 - 525 of 526

I enjoy reading your postings, you would make a very suitable CEO at EPO, interested contact local job market, normal quick and effective route for cos like EPO judging on their labour turnover !!!!!!!!!!!!

This is the list from Hemscott of shareholdings in EPO.

Metropole Europe Corporation 9.22%
Gelande Holdings Ltd 4.46%
Savoy Investment Mgmt Ltd 3.46%
R B Rakison 1.52%
Other Dirs 0.04%

Apart from the fact that there is a lot of shares which are unaccounted for, and I know that Gelande is tied in with RC, does anyone know of how to contact Metropole and Savoy Inv. Mgmt to make them aware of this bb. Presumably they are also sitting on large paper losses at present and might be getting the same BS/false promises/apparent lies as we small shareholders are? Only by getting these shareholders on board can we hope to change RC's attitude to shareholder information or get him removed from our company.

Otherwise the share price is going to get so low and desparate that someone will come in and buy the co. at rock bottom price, whether that be the present management, baltimore, (what a neat way to get rid of court action and get the technology that you so say committed to use at much higher prices some years back) or another co. just wanting the technology or customer list.

PS. How many people on here really do believe that the trading statement will arrive today or Mon. and when or if it does that it will be worth the paper if we were to print it out!?

so glad i never listened to shares mag

i,m probably being naive here but would,nt Shami Ahmed have got a lot closer
to the books,potential,etc. than we or Tim Freeborn could before deciding to
invest.

drunker50,

why? It's long on talk and short on substance,(which was Tims point) unless of course you believe what they say..if you do great! If you don't, there is still an awful lot of unanswered questions..

regards

T..

i will never listen to that cheap amatuer rag again
just look at this

buy earthport @2.62 3mnths later 50%loss
sell earthport@1.32 next day 25% gain

i do not have a view on this stock,but i have been watching with interest the comments. the right thing TF can do now is to post his comments on the trading statement issued today instead of waiting for next weeks issue.cheers woodie

TF, Do you still have a holding ?

he's not allowed to post here anymore!!!!

I hate to say toldyou so - But I am now even more than happy about unsubscribing from Shares Mag. No Doubt the wingers will be out in
force on this BB very shortly knocking EPO and finding every negative possible in the statement. Reminds me of the old lady's knitting as the Guillotine
came down. They didnt last very long !!!!

Well Well Well.

Earthport says Q4 revenues up 47 pct vs Q3 - UPDATE
AFX


(Updating with more comments on trading)

LONDON (AFX) - Earthport PLC, an electronic payment services company, said its fourth quarter to June saw the highest revenue flow and growth since 2000.

In a trading update, the company said although it is not yet cashflow positive, 'that goal is now clearly in our sights.'

Revenues grew by 47 pct in the fourth quarter from the third quarter and opening of new e-wallets accelerated by 75 pct in the period.

The company expects to add an SMS payment gateway in September and a local and international debit card in October, which it expects to contribute to additional revenues.

It said it is negotiating further public service deals in Europe involving mobile top-up, over the counter and kiosk services.

Referring to an announcement last March about the acquisition of a US-based online banking service company, earthport said today that following due diligence it decided not to proceed with the deal. Instead, it will seek to replicate and provide the services in conjunction with various banking partners in the US, Europe and Asia.

The group said it has had only limited success with its gaming cleared cash solution and has decided to transfer all its gaming-related payment services, merchants and relationships into a new stand-alone independent company, incorporated in Jersey.

Earthport said ensurePay will be launched as a gaming merchant payment services provider via a branded website. It will offer both ensurePay branded payment solutions for SME merchants and white-labeled payments solution to the larger merchants.

Referring to its 13.5 mln stg claim against Baltimore Technologies PLC, earthport said it is 'very confident' of the outcome.

It also has a claim against Egg PLC and Prudential PLC, which it expects to serve in September. Earthport said the inability of Prudential to find a buyer for Egg has lessened the need for immediate action.

The company has obtained a judgment for 130,929 stg against BT Group PLC relating to the December 2001 'Stored Value' contract with BT Ignite.

Shares mag and TF, generally you do a good job, keep up the good work. I guess a few beers will be downed tonight as it appears RC has well and truly stitched you up, never mind, take it with a pinch of salt and keep smiling. to all the whingers that bought hi and sold low on the basis of a magazine tip, suckers!!!!!!!!! Do your own research not rely on other peoples for yopur tips and then you will be a tad more better off!

Some of us whingers just kept on buying ............ Way to go. GL

For you guys : press mention, will appear in tomorrow's Daily Mail Newspaper.

Beyond the Footsie: Friday close
20 August 2004, This Is Money

Earthport closed 0.32p higher at 1.67p, after issuing an upbeat trading statement this afternoon.

The electronic payment services company announced that its fourth quarter to June saw the highest revenue flow and growth since 2000.

http://www.thisismoney.com/20040820/nm81651.html

Just been reading the Trading Update (TU)_but surprised by the relative silence on the BB (everyone away for a long week-end?). Price sharply marked up to 1.675, up 24% on day. Thought it would be helpful to give some initial reaction in the hope that it might spark some insights. Firstly, though, a word for Shares Magazine. I can't see that it was helpful to post a Sell, whatever the feeling of being let down by failed promises, before the TU came out. What we need is a considered reaction, including comment from someone who knows the market and earthport's position in it. I feel that the people let down are those who sold at rock bottom earlier in the week on your advice. I suspect most of us held for the TU. This has positive aspects but raises questions; so where do I go for professional guidance? - not most brokers or analysts who are too tied up with bigger fish. This is where I see SM coming in. John Marshall's contributions set the standard - even the entry "the writer holds shares in the company" is a worthwhile accolade. This is probably 'not his e-wallet' but an alternative would be to use a specialist analyst. Please take up this challenge.

Turning to the TU, there is some help to the investor but also queries left unanswered. I suspect an effort to 'confuse us with facts' but unfortunately these are mainly of a technical/application nature. Useful input:

1. 800K has been invested via convertible loan notes. 1.5M funding is available from a joint venture company for systems which means that 120K monthly costs are saved. License revenue is conserved. Presumably the joint venture partner will own the systems whilst EPO retains license revenue. 1.5M is anticipated from an 'agreement in principle' to sell a minority stake in ensurePay Ltd - it is claimed that no further EPO shares are to be issued but this minority stake clearly has a similar effect. I think I am right in concluding that the gaming services will be operated from this company.

2. The main trading facts are that revenue is up 47% in the 4th quarter (April to June) over the third quarter. Unfortunately we don't have a comparison of the 3rd quarter with the first half which we know. 'Opening of new e-wallets accelerated by 75% in the 4th quarter' (Which is presumably reflected in next quarter's revenue). Delivery has been made to Wanadoo but revenue presumably comes in current year. Three new customers come on stream in October. "While the company is not yet cash-flow positive, that goal is clearly in our sights".

3. The encouraging factor re the legal claim against Baltimore (and potentially EGG) is that a positive judgement has been gained for a claim of 130K agaoinst BT Ignite. Might this act as a precedent for the Baltimore claim and make more sense of it?

The TU makes reference to exponentially increasing markets aand this was the attraction I saw in EPO. The key question is 'when will the company become cashflow positive'. Clues as to management expectations are (a) the amount of money raised and partnerships established to get the company to that point; (b) the business build-up closed for Q2. The 2004/5 trading position should be clear by then - no sign of a date for results which should give better projections. The company has traded at 3 to 4p in the past, implying a capitalisation of 20 to 25M. Once the positive cashflow date can be confidently predicted, the price should recover to those levels. There must be a downside risk - this report announces measures to remove costs and the suspicion is that such actions perhaps might not be capable of repetition.

The share is not for the faint-hearted even now. My own holding of 900K shares is large enough for the present. I am running my profits in ASOS (John Marshall holds shares in this comany!); given that it has the bull-run I expect in the Autumn, I could well make a partial switch to EPO if the positive interpretaion of future trading is confirmed. Over to you fellows (and girls).