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".

Thanks Moneyman for bringing this to my attention ! You look like you are good with the tips as I have follwed you in ETQ and SPS and made good money.

Regards Buy vs Sell the best guess system does not work. If you have followed this share for a time you will see that BIG BROTHER gets to buy at mid price ! Also MMs will delay buys to look like sells.

Dont believe what you see on these financial sites.

Wow - this looks very positive (I think we could be in for some more strong buying today):


RNS Number:7220U Pipex Communications PLC 28 January 2004


PIPEX Communications plc
Year End Trading update

Following the close of its 31st December 2003 year end, PIPEX Communications plc ("PIPEX"), the telecoms network operator and provider of broadband solutions, is pleased to announce that the integration of the 5 acquired businesses (GX Networks Limited, XTML Limited, CIX Limited, Firstnet Services Limited and PIPEX Internet Limited) has now been largely completed, on schedule, delivering greater than expected cost savings.

PIPEX's broadband division experienced rapid growth in 2003 with customer numbers increasing by 138% to over 100,000. PIPEX now operates one of the largest IP Stream data networks in the UK and is the fifth largest broadband operator in the UK.

Through acquisition, the group has enhanced the range and scale of products in its portfolio, which has led to a gross profit margin improvement from 25% to 43% by the end of 2003.

Following the acquisition of PIPEX Internet Limited in October 2003, we are exploiting the benefits of additional scale and extracting significant operational efficiencies. As a result, the Group has become EBITDA positive and operationally cash generative, and the Board expects this position to strengthen through 2004 as top line growth moves forward and further cost savings are realised.

Based on good market fundamentals, particularly in broadband, we expect strong growth over the next year and, following the series of acquisitions in 2003, we enter 2004 with the infrastructure and staff in place to exploit this significant market opportunity.

Would being on Broadband improve the speed of page changing on Money.am etc.?

grandma,

it will improve the speed at which your PC can get the pages yes. But your PC might then become the bottle-neck.
If you want specific technical info pls start a new thread and I'll add any helpful advice there for you. Rather than here on the PXC thread.

cheers,
skids

p.s. i don't work for shares btw.

Thank you Skids. Still getting the hang of using the site. Will consult Grandpa- it's his computer.

nice finish to the day!!

Tip Update: Pipex looks like a shrewd choice
Published: 08:11 Thr 29 Jan 2004
By Joanne Wallen, Associate Editor
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Two highly-rated fund managers have bought more shares in Pipex, an alternative telecom company that is now earnings positive and generating cash.

Citywire first tipped the company, formerly former GX Networks, last August at 5.625p. The shares () are currently 10p valuing the business at 178 million. We have also since then highlighted the presence of AA-rated Roger Whiteoak and AAA-rated Patrick Evershed.


Both have recently added significantly to their stakes. Evershed added 1.47 million shares to his New Star Select Opportunities fund to take his holding to 11.6 million shares, while Whiteoak has added 6.7 million shares since the start of December to take the Framlington UK Smaller Companies Acc fund's holding to 11.29 million shares or 0.62%. He also holds 47.4 million shares in the Throgmorton investment trust(THRG).


Pipex chairman Peter Dubens said the company was making good progress and was probably one of the only alternative telecoms operators to have reached profitability - albeit before goodwill amortisation and depreciation.


Dubens has built the company rapidly since buying the privately owned GX Networks and reversing it into Zipcom last year, acquiring distressed companies and stripping gout excess costs. Since October 2002 he has stripped out a total of 20 million of annualised costs and there is a bit more to come.


The major change to this strategy came with the 55 million acquisition of Internet Service Provider Pipex in October. Pipex was not distressed - it was profitable and cash generative and Dubens wanted the company's well-known brand as well as its broadband telecoms offerings. The company has since changed its name to Pipex.


This year Pipex expects to see continued top line growth coupled with further cost savings.


The company is seeing very strong growth in supplying broadband services both to consumers and to large corporates, particularly for connecting employees from home. It also offers hosting, wireless broadband, voice and security services to business customers.


House broker Collins Stewart reckons Pipex stands on one measure at a 70% discount to its sector. It has a short-term price target of 12p but reckons there is considerable upside potential in the next 18 months and has not assumed any further acquisitions or subsequent cost cutting in its forecasts.


Citywire Verdict:


The shares have clearly done well since August but the company has a lot going for it, not least a very low cost base for its infrastructure.

It would not be at all surprising to hear of further acquisitions, which should be only good news given Dubens' track record to date. I would certainly hold on for now, and those with a longer term horizon could still consider getting in at this level.

Looks to me as though the house broker are implying that 20p is not far off :-)

Interesting post from "The Knowing" on another board (raises the stakes on my estimate somewhat):

"...It has been stated by City folk that this is trading at a 70% discount to it's compeitors !! THUS is a competitor. Look at it's balance sheet compared to PXC !

OK so what is 7-% discount equivelent to ?

35p yes 35p !!!!!!!!

Take a look at the statement again.

100,000 Broadband customers at say 20 pound a shot !

100,000 customers X 12 Months X 20 pounds = 24,000,000.

Now add on the other business !!"

Overgrowth, I share your thoughts on

100,000 x 20 pounds x 12 months= Turnover of 24million add All other businesses...and you've have a pretty good business and regular high turnover in a growing and exciting market.

I wont be selling for a long time, considering I've only held since 3 months back.

Pipex will no doubt hit the 20p-30p mark from current 10p, I dont think anybody really doubts that anymore, However after calculations of yesterdays statment I have increased my overall target also. I would even stretch my kneck as far as saying it may well hit close to 20p mark in a very short space of time now, as yesterdays statment was way excellent.

My overall target will be a cool 1.00 pound, I dont mind the wait...no hurry on my part...with acquisitions and regular turnover, it will hit this down the line at some point, 12 months target, i.e this time next year..

Exciting times, watch PIPEX ...!

PXC (nee GXN) has been the darling of my portfolio since I bought on a Shares Mag tip last year. Got my first batch at 4.9p making it officially my first double-bagger!

overgrowth - what time frame do you have for the possible 35p....end of 2004 or 2005. It will be interesting to see the full year accounts as all the write offs should be completed and then looking at profit from then on. I think the 1 pound mark is still a long way off as the mc will be massive....unless they merge or take over again. I know you can never second guess but I think we will see stability for a while, get more cash to fund purchase to not dilute shares, before thay purchase more.Interested in how others see it.

Hmmm. good question, particularly as I was quoting the 35p from another poster.

Full year accounts are crucial and over the next couple of months we need to see evidence of continued institutional buying (which has been going on for some time).

Judging by the rate at which some other TMTs have risen I would be tempted to say end of 2004, though I think PXC is more likely to be a slow solid rise to complement the way the company are gradually building on their successes. I'll stick my neck out and say end of Q1 2005 and PXC will be at or around 35p.

Whereas some companies' share prices have risen too far too fast, I think that only solid justifiable increases will be seen with PXC. The market cap is going to be hefty as the price rises and the business needs to be there to back this up.

Pipex going again, is it just volume that is driving this share up, eager to bank some profit but dont want to miss out on long term... Does that 16p barrier look relastic in next six months?

This is my third best punt after PDX and ITU. I came in at 6.88 and am expecting a triple banger within 3 months

Five tech stocks that could deliver in 2004
Published: 08:10 Mon 2 Feb 2004
By Richard Lander, Editorial Director
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Picking some technology winners for 2004 is a far tougher job than finding those for 2003, but here are five companies that should have bigger things up their sleeve this year.

Our five technology tips for 2003 gained an average 78% in twelve months and several others that we selected in the middle to end of 2002 have done even better.


However, we have been warning for some time that valuations appeared to be running ahead of actual company results, and as we stand at this early stage of 2004, it looks highly unlikely that we will see anything like the levels of return available last year.


One veteran technology analyst, Richard Holway of Ovum, reckons we are likely to see a correction in technology stock valuations half way through this year, and his forecast for growth in the tech sector over the next decade is a very modest 5% a year. However, he does concede that there are still some good individual companies that should offer opportunities for greater returns.


The five tech companies we think could still do well this year are; Pipex Communications, Intec Telecom, Systems Union, Eckoh and, still speculative at this stage, Superscape.


* PIPEX (PXC) is an alternative telecoms company that has been rapidly built by taking advantage of a unique moment in history. The former GX Networks reversed into AIM-listed Zipcom and bought up several small companies that had invested millions of pounds of dotcom-era money in infrastructure only to burn through their cash before they could realise a return on their investment. Pipex's management has an aggressive strategy of cutting costs and leaving itself with the valuable infrastructure.


The company made an audacious 55 million acquisition of profitable internet service provider Pipex in October 2003 and has just produced its first profits before goodwill amortisation. It looks as though there could be more acquisitions in the pipeline, and the business now has the feel of one that could become a far larger player and a serious alternative telecoms operator to the UK business community.


The shares are currently at 10.5p, valuing the company at 187 million. This prices the business at 26 times this year's forecast earnings. While this may not be exactly cheap, you would be buying in to the distinct possibility that Pipex could become a much bigger player in the next 18-24 months.


* INTEC TELECOM (ITL) provides billing and operational systems software for telecoms companies. Its interconnect billing software enables operators to bill each other for calls carried across their networks and its mediation software gathers all of the necessary data from the telecoms switch to feed into systems such as billing and security. The company has had to scale down its expectations during the severe telecoms downturn, but has still managed to sign significant new business and turned in revenues for the year to September 2003 up 7% at 59.7 million with pre-tax profit before write-offs of 5.4 million from 2.2 million last time.


At 71.5p with a market capitalisation of 187 million the shares trade on a rating of 28 times next year's estimates. So at first glance it looks pretty fully valued. However, there are plenty of fund managers who seem to think that analysts are still being overly cautious on their earnings estimates in general, and that therefore there is scope for upgrades if the economic recovery shows signs of longevity. The punt on Intec is that for the type of software it provides to the type of global customers that it services, 148 million is still a pretty insignificant size with plenty of scope for upside.


* ECKOH TECHNOLOGIES (ECK) has spent the past couple of years incubating its new speech recognition technology, aimed at further automating call centre and interactive voice applications. The company has a deal with BT, under which BT hosts the system, and, hopefully, brings in some blue chip customers. Eckoh's bread and butter business is interactive voice response (IVR), and it recently announced a win with ITV to provide the voting, polling and interactive services used on programmes such as This Morning, CITV, Ant and Dec's Saturday Night Takeaway, Trisha and The Vault. (continued...)

The company saw turnover for the half year to September down slightly at 25.7 million, although continuing operations were up slightly. Operating losses were reduced to 1 million from 7.4 million and net losses down to 1.3 million from 9.4 million. The IVR business is profitable, but it is the new speech business that has yet to break even.


At 16.5p (38.6 million market cap), the company is valued at 18.2 times next year's forecasts, but a couple more large wins for the speech software could significantly transform the company.


* SYSTEMS UNION (SUG) is the developer of Sun Systems and Pegasus accounting software chaired by serial entrepreneur Bob Morton. It ran into trouble a few years ago when, known as Freecom at the time, it made a disastrous acquisition of ecommerce company Oneview, for which it had to write off a massive 100 million.


* SUPERSCAPE (SPS) has been promising jam to investors for so long now that many have given up and walked away. Citywire has followed the company for several years, and now reckons that if 2004/5 is not Superscape's year, nothing will be.


The developer of real-time three-dimensional graphic software originally designed for virtual reality on a PC finally found the perfect market for its technology in the mobile phone space, and particularly for the next generation of mobile phones. The company effectively re-wrote its software for wireless, and in the past couple of years signed a deal with chip designer ARM to embed the software into ARM's mobile phone chips. Significant deals with handset manufacturers and content providers have started to flood in but as yet we have not seen any effects of these on revenues or profits. The last published results in October showed turnover for six months to July of just 94,000 down from 510,000 the previous year with losses down 26% to 3.7 million. However this did not include any revenues from the wireless business.


Since the start of this year the company has announced licence deals with two further brand owners. But there is still a problem with Superscape. Citywire has been talking about its jam tomorrow story for a couple of years now. Research analysts have clearly been driven away from the stock, and even house broker Evolution Beeson Gregory has not written on the stock since September, at which time it was still expecting a 5.4 million loss for the year just closing.


ARM has taken a 12% stake in Superscape and also put substantial research and marketing effort into the deal. There are some very large names being announced as licence partners, and Superscape could be on the cusp of becoming a major supplier of both software and content (sophisticated 3D games in particular) to the mobile industry. If that were to happen, its 34p share price and 42 million valuation could look very cheap in a couple of years time. But we are still waiting to see the money roll in.

I like you hold PDX and PXC, got in 4.88 and 6.89 on PXC so should start looking
at banking some profit soon...

Would not bank any profit untill the share realy stalls, I bought at 3.3 but think there is still a lot more in this one yet. I think the punters who hold on till 2005 will be very happy. The question is will they buy again this year to keep the momentum going. The banks will be happy to lend but what is out there and ready to purchase as most stocks seem to be on the up at the moment.

Sitting pretty at present just watching the price rise week after week at present, just waiting for PDX to go now, that should motor once contract details
released soon.

Could see the 16-20p barrier pretty soon, as recent reports by PIPEX suggest all is going excellent and earnings future very rosy indeed.

Acquisitions news may follow soon I think due to last statement hints, any suggestions holders?