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ICS - ICS Global

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skc

skc

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Description from Iress

ICSGlobal Limited (ICS) is a holding company with a 100% owned subsidiary
involved in medical billing services. ICS provides medical billing services to
the United Kingdom and has registered office in Australia.

OPERATION: The sole operating business of the company is Medical Billing &
Collection (MBC) business in the UK. This business advises medical consultants
and specialists on their billing processes and collects debts on their behalf.
ICS is also seeking new Australian business opportunities.
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Market cap ~$8m. Guidance for FY14 is $0.55-0.65m NPAT following Q1 profit growth of 44%.

Clean balance sheet with no debt and cash ~$1.1m.

DYOR (I hold)
 
SO do they provide their software to doctors surgeries and the like? Or on a bigger scale to public hospitals?
 
OK... which one of you read my post and went a bit silly with the on-market buy orders.

It got pushed to 6.7c (up 60%) at on stage... it's probably getting a second wind now having drifted back down to 4.6c.
 
skc said:
OK... which one of you read my post and went a bit silly with the on-market buy orders.

It got pushed to 6.7c (up 60%) at on stage... it's probably getting a second wind now having drifted back down to 4.6c.
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It was on YMYC last night, which might explain it. But I'm sure the caller only rung up because he read your post...Or maybe you were the caller.
 
skc said:
Description from Iress



Market cap ~$8m. Guidance for FY14 is $0.55-0.65m NPAT following Q1 profit growth of 44%.

Clean balance sheet with no debt and cash ~$1.1m.

DYOR (I hold)
Click to expand...

This thing is all over the place.
I've only had a very quick look - but looks like a ticket-clipper to me, if it got some inertia behind it this one could become much bigger....
 
VSntchr said:
I've only had a very quick look - but looks like a ticket-clipper to me, if it got some inertia behind it this one could become much bigger....
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Presentation says guidance of underlying 0.55-0.65m up from 0.31m last year. Even if you annualise the 30% rev growth achieved in July, earnings would not reach this level - therefore cost reduction is continuing and margins are expanding. Impressive to be showing those characteristics at such a low level of revenue IMO...

For the short-term focused - any upside in earnings is compounded by the beneficial tax assets being "written back" to quote management.
 
VSntchr said:
Presentation says guidance of underlying 0.55-0.65m up from 0.31m last year. Even if you annualise the 30% rev growth achieved in July, earnings would not reach this level - therefore cost reduction is continuing and margins are expanding. Impressive to be showing those characteristics at such a low level of revenue IMO...

For the short-term focused - any upside in earnings is compounded by the beneficial tax assets being "written back" to quote management.
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It's a billing business so it's going to have a fairly large portion of fixed cost so you will get pretty good operational leverage from rising revenue.
 
Still holding SKC?

Looks like there may have been something dodgy go on to ensure that management received their bonuses. Share price mysteriously went to exactly the 6c hurdle rate and instantly fell back down.

Could be coincidence but interesting nonetheless.

Half yearly result should be out late Feb so will be interesting to see if the metrics have continued to improve.
 
VSntchr said:
Still holding SKC?

Looks like there may have been something dodgy go on to ensure that management received their bonuses. Share price mysteriously went to exactly the 6c hurdle rate and instantly fell back down.

Could be coincidence but interesting nonetheless.

Half yearly result should be out late Feb so will be interesting to see if the metrics have continued to improve.
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Yes still holding but did reduce a bit in earlier spike.

The share price went above 6c back in Nov so the Jan move to exactly 6c is probably not relevant. However, having performance rights linked to share price AND conducting on-market buyback... it's certainly skewed in favour of the directors.
 
VSntchr said:
Half yearly result should be out late Feb so will be interesting to see if the metrics have continued to improve.
Click to expand...
And they have....

ICS global.png

Paying a 0.05c div and a 0.05c special div. Not franked as they make their bananas over in the UK.
Very illiquid so unfortunately only a small holding for me, but I like this one nonetheless.
 
Some big selling pressure this morning, volume way up...ICS is very illiquid and these volume jumps are not uncommon...would be good news for holders if it signals the end of the overhanging seller.
 
Interesting to see that Pie Funds has taken a 14m unit holding in ICS.
Looks like they had 3m or so and then took a big chunk on Tuesday. Wonder if this has cleared the overhang that the ex-director held.

In any case, I don't think I could ever be comfortable holding 14m units of ICS....the only way out is through a cross, as the last six months volume has barely exceeded that...you'd wanna be pretty confident that things aren't going to go pear shaped!
 
Some random thoughts from me:

While the company is a holding company that invests in others, MBC is really the only thing it owns that has value. If only I could own MBC without the risk of the parent company using its profits to go on another acquisition spree. ICS's previous record of doing so is bad and it is generally a high risk/money wasting strategy even under the best of management. I would much prefer that the excess funds were given back to me, so that I could choose myself what else to invest in.

With that positive encouragement out of the way, let's look at MBC. It is a terrific business. Collections is a job that no business owner is interested in doing, it's just extra hassle that most would be happy to get rid of. What's better, economies of scale and experience should make it cheaper to use MBC that handle it yourself as a small-medium business. It's a win-win situation.

For the same reason that it is attractive to sign up, the reverse is true. The customer base is sticky, they are not going to move away on a whim. It is a part of the business that people will be reluctant to move back in-house. While competition is there, not many will consider switching easily. These are small businesses employing highly paid people. This is not the core of their business and the savings they may potentially get from switching may be too small to bother with in many instances.

Their results so far also show that it is an excellent business that improves with scale. Revenue/profit are steadily growing, margins are improving (slightly) as well. At a current market cap of $11m, one buys a business that is set to make $800k this year and is expected to grow well over many years.

With ICS, I see a great business, that is unfortuatenly owned by a parent company that introduces extra risks and overheads.

Can anyone explain to me what was the nonsense of doing a 1:20 consolidation, other than to waste time and money of everyone involved? From the update: "211 million shares on issue was considered too large".
Too large for what? Are they counting them by hand?
 
KnowThePast said:
Some random thoughts from me:

...
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Interesting, i hadnt seen ICS until you posted, KTP. I did have a bit of detailed look at it and it is quite interesting, as you say it would be prefereable if you could just buy the only real business in there! I see they put a couple of hundred thousand into Open Learning, seems a tiny investment - if its worthwhile then surely its worth putting more than that in?

The only other warning sign i saw was a big increase in costs via payments to employees and suppliers which is goint to put a dint in the cash flow this year - and i couldnt find any specific explanation for the size of the increase relative to the increase in revenue.

The rest of the metrics i track looked pretty good to me, I think I will put this one on the watch list!

The only other explanation i saw for the consolidation was that other companies of a similar capitalisation had much smaller numbers of shares on issue - not much better than the reason you quoted!
 
6 years on, ICS will be a shell looking for something to do. I am surprised they are returning that much to shareholders. End result after selling the MBC business and returning the money to shareholders, it will be valued at around $0.47 per share with a total assets around $4.6m
 
Country Lad said:
6 years on, ICS will be a shell looking for something to do. I am surprised they are returning that much to shareholders. End result after selling the MBC business and returning the money to shareholders, it will be valued at around $0.47 per share with a total assets around $4.6m
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Yep, I guess another one slips away .... or will it reincarnate (with the usual board changes, new CEO, cap raise, etc) ??

After a competitive bidding process the proceeds were converted into Australian dollars at the exchange rate of one AUD=GBP .5594. ICS received approximately AUD22.9 million.
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ICS is continuing its work with the ATO on the class ruling to confirm treatment of the return to ICS shareholders and will promptly make the return following the finalisation of the ruling.
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Feb 2021: The Board will be actively looking to invest
• ICS will have $4 - $5 million in cash after the sale and distribution to shareholders
• The Board is now actively searching for investment opportunities
• Once the Board has found an investment opportunity that we believe will add value to our shareholders the Board will hold an EGM for shareholder approval
• The Board of ICS have taken steps to reduce cash costs of the entity going forward from c. $530k per year to c.$400k, including 50% reduction in director and company secretarial fees
 
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