WLL Wellcom group going well...

[donnie]

Wellcom group isnt the most exciting company in the world but it sure has performed very well since listing.



Wellcom is a production based solutions company providing specialist services to advertising agencies, corporate companies, and some of Australia’s leading retailers.

Wellcom’s business covers colour management, pre-media, photography, creative retouching, printing, customised technology solutions and facilities management. These services utilise cutting-edge technology, designed to deliver maximum efficiency without compromising quality.

Established five years ago, Wellcom has grown rapidly from a small team to a national network that now employs over 180 staff.

The Wellcom culture is unique, and a reflection of our talented team who have a passion for excellence and a positive, innovative and enthusiastic attitude. Every staff member plays a vital role in the success and growth of the company. Together we possess industry knowledge, expertise, and a wealth of valuable experience.

Wellcom has built an enviable reputation within the industry. We are determined to maintain our position as market leader, and we are committed to delivering the best possible product to the industry, both now and in the future.

the future

Wellcom understands that to maintain the best possible service to our customers, we need to continually explore new channels of communication. We need to understand how consumers react with new media and new variations of traditional media. Our mission is to provide all customers with the most technologically advanced production facilities in the world.

Our quality remains paramount, our quest for new developments and innovations enables our services to be revolutionary. These exciting times allow us to provide cross-digital services that combine the channels of broadcast, print and electronic media, into the one production facility. A facility that will ensure our clients increase their creative inspirations with cost-efficient executions whilst not compromising quality.

In 2005 we will be building a new state-of-the-art facility in Port Melbourne. We will further develop our Sydney facilities, ensuring our continued leadership in this evolving market.

__________________________________________________ ________________

INTERIM RESULTS IN LINE WITH EXPECTATIONS – TARGETED
FULL YEAR EBITDA GROWTH OF 10 - 15% REAFFIRMED
23 FEBRUARY 2007
Wellcom Group Limited (Wellcom) (ASX: WLL), a leading Australian provider of pre-media
and digital asset management services to corporations, retailers and advertising agencies,
today announced its interim results for the six months ended 31 December 2006.

1H07
$m
1H06
$m
Change
Revenue 20.17 17.51 +15.2%
EBITDA 5.98 6.03 -0.9%
EBIT 4.45 4.80 -7.3%
Net Profit After Tax 3.40 3.39 +0.2%
¢ ¢
Earnings Per Share 8.68 8.66 +0.2%
EPS (excl. intangible amortisation) 9.60 9.76 -1.7%
Dividend Per Share 5.00 5.00 -

“This is a sound result which is in line with our expectations, and one which reflects the
upfront costs associated with new business,” said Mr Wayne Sidwell, Executive Chairman
and Chief Executive Officer of Wellcom. “Our revenue growth, in particular, highlights the
strong underlying momentum of the business, driven by both organic and acquisitive
sources.”
“We continue to pursue a strategy that embraces growth from existing clients, a broadening
of the customer base through new business gains and the execution of synergistic
acquisitions. Underpinning all of this is a commitment to new products and services and to
ongoing investment in cutting edge technologies that facilitate end-to-end tailored solutions
for our customers.”

“During the latest half we have had further success with our total facilities management
(TFM) service concept, consolidating Pacific Brands and being chosen in November to
manage the hub at Westpac’s Kent Street headquarters in Sydney. These are important
new customer relationships, which are consistent with our aim of generating organic growth
through partnership with bl

[mark100]

Ok not the most exciting of shares but a solid company with a good track record. I have purchased recently and today it looks like its finally starting to move a bit. The AGM speech yesterday seemed to be quite upbeat.

Trading on a FY10 PE of around 10.8 and yield of 6.6%. ROE of 15%. No forecasts have been made for next year but their UK division lost around $0.5m last year and they expect a profit there this year so that alone adds around 6% to overall profit. I think overall NPAT and dividend could grow by at least 15% in FY11

[Lizard]

That was a much better result from WLL than I'd expected there. Looking pretty cheap at last-traded price ($2.20), with PE under 9 and yield of 7.5% plus franking - and I think still holding cash as well (not sure what their latest acquisition and JV changes cost).

[Lizard]

Just read through the agm presentation. While there are no forecasts, there is certainly an infectious optimism. And, well.... I'm infected! :)

Currently still $2.20, but should be knocking on $3 in my opinion.

[Lizard]

Bit of volume through here recently. Still only $2.20:$2.21, but I am reading the depth and chart as larger side accumulation.

Still a bit illiquid to put too much on it... though I'm no chartist, I'd say more of a consolidation than a trend. But enough signs to be worth watching.

[h2so4]

If the sp fell I would be in for a few more, but as you say Liz i'ts only a smally.

[Lizard]

Since "solid" seems to be word of the season when it comes to results, I am going to say that I thought this one was rock solid. Especially in the face of forex pressure on UK earnings - which seemed to perform well. Div increased by 0.5cps to 8.0cps for the period, taking annualised div to 17cps (+ franking). Normalised for tax and discontinued operations, profit rose 10%.

Price fell to $2.45 just before the announcement and did not trade afterwards.

[Lizard]

Price has gone nowhere since last post - last sale at $2.40. However sellers seem to have disappeared and only one on the board at $2.79, with a creeping bid now at $2.45. Has done little since I bought in last August at around $2.20 (although the div helps). But I'm hoping patience pays off...

[h2so4]

Price has gone nowhere since last post - last sale at $2.40. However sellers seem to have disappeared and only one on the board at $2.79, with a creeping bid now at $2.45. Has done little since I bought in last August at around $2.20 (although the div helps). But I'm hoping patience pays off...

You only have to ask Liz, now up 13% since Aug, keep asking please.

[Lizard]

Had a good month since last post and now at $2.80 leading into results. Trajectory might just take it into the All Ords next year. :)

[Lizard]

Result out - I thought second half a little weaker than expected and final result impacted by increase in tax plus loss of profit from discontinued operations... so only a stable result at this point. Cash at 40cps. However, some good "wins" and 2013 looks set to be another step-up year for profit. Dividend now at total 18cps, so would expect some increase on the current $2.90... holding for $3.50+

[h2so4]

Result out - I thought second half a little weaker than expected and final result impacted by increase in tax plus loss of profit from discontinued operations... so only a stable result at this point. Cash at 40cps. However, some good "wins" and 2013 looks set to be another step-up year for profit. Dividend now at total 18cps, so would expect some increase on the current $2.90... holding for $3.50+

3.50+? Yeah I like that.

[steve fleming]

Interesting development...

http://www.proprint.com.au/News/315407,wellcom-wins-nabs-multimillion-dollar-print-management-deal.aspx


""Details of the major print management deal (http://www.proprint.com.au/News/315407,wellcom-wins-nabs-multimillion-dollar-print-management-deal.aspx), which could be worth more than $10 million per year, are being worked through, with the contract expected to be signed next month. ""


You would think a $10m annual recurring contract would be market sensitive...??

[steve fleming]

http://www.tower.co.nz/investments/news/trans-tasman-equities/2012/making-a-wellcom-investment

Making a Wellcom investment across the ditch

Fri, 23 Nov 2012

Commentary by Richard Stubbs - Head of Equities, Stephen Bennie -
Equities Manager, Gordon Sims - Equity Analyst, and Jamie Young -
Equity Analyst

We continue to seek quality and value companies that are priced at a
significant discount to their long term intrinsic values.

Our research process is focused, intensive, primary and long-term.

The process assesses the value of the target company as if we were
buying 100% of the business.

Our most recent acquisition is good example of our philosophy and process.

While we have been regularly visiting Australia, it is only recently
that we have seen some real opportunities.

These opportunities are presenting themselves as a result of extreme
investor nervousness about Australia, which is struggling with a bad
bout of "Dutch disease" induced a high currency exchange rate, and
assailed by growing worries over where the commodity boom is
ultimately headed.

In nervous investment times, companies can fall dramatically in and
out of favour, generally thanks to changeable investor confidence in
near-term earnings certainty.

We use Philip Fisher's investment principles as a guide to finding
value amongst "might be" mid-cap growers

An example of a company that has been out of favour is Wellcom, a
small technology firm not covered by the research teams of any main
brokers.

We identified Wellcom as an opportunity through our proprietary
screening for quality/growth companies in New Zealand and Australia.

The company"s growth has not been dramatic, but it has been consistent
over a long period.

It has also delivered solid margins and returns, and importantly has
converted profit into free cash flow.

Wellcom passes through our quality gate; more specifically we class it
as a "mid-cap grower".

We visited its head office in Melbourne and were given access to all
of the key personnel.

We also visited a regional office and spent a substantial amount of
time speaking to other industry participants; customers, competitors,
industry commentators.

All feedback was overwhelmingly positive.

Any negative comments were able to be qualified by other parts of our research.

Wellcom appears well positioned to continue to benefit from an
industry trend to separate creative production services from graphic
production services.

While creative production used to be the domain of advertising
agencies, companies seeking ways to lower costs are increasingly
appointing more efficient providers to produce this creative content.

Wellcom has developed a world leading software platform to manage and
store digital assets that provides the firm with several competitive
advantages.

This platform creates a marketing point of difference, allows content
to be produced very cost efficiently, and increases customer
"stickiness" when installed and used by the client.

It serves as Wellcom"s defensive "moat" against would-be competitors
intruding into its market.

The culture within the business is customer-focused, innovative and dynamic.

Importantly, people enjoy working there.

Valuation was the easy part for this company.

If you can find a company that has solid growth prospects, excellent
stewardship, high returns on capital, high levels of free cash flow
conversion and no debt, then you can"t go too far wrong buying it at
discounts to the market and the long-term average PE.

We use Philip Fisher"s investment principles as a guide to finding
value amongst "might be" mid-cap growers.

Fisher"s demand for management integrity is unconditional.

"If there is a serious question of the lack of a strong management
sense of trusteeship for shareholders, the investor should never
seriously consider participating in such an enterprise," according to
Fisher

We ultimately bought a substantial amount of Wellcom"s shares from the
major shareholder, who is also the founder and executive chairman.

Often you can get burned buying from an insider.

This insider, in fact, was nervous about selling to us because of the
likelihood, publicised at the Wellcom AGM, of a flat year partly due
to the loss of the large contract.

In fact, this concern does appear to have spooked some other investors
who were interested in taking part in the placement.

However, in our opinion, the long-term outlook is very good for this company.

Any concern regarding next year"s profit just provides us with an
entry at a reasonable price.

We are happy to take a long term view and look past this minor hiccup.

The fact that the seller wanted to wait until we were fully informed
and was frank and open to us about the negatives as well as the
positives indicated to us that this is a company that acts at the
highest levels of integrity.

For us, Wellcom meets the test outlined by the quotation from Philip Fisher.

[trackers]

Are you a holder Steve? Did you know about the loss of the large contract? Divvie looks good

[steve fleming]

Are you a holder Steve? Did you know about the loss of the large contract? Divvie looks good

Hi Trackers - yes I hold.

There was mention in the AGM of the loss of a key London photography management contract (which i assume is the 'large' contract Tower refers to. Though WLL noted this was likely to be offset by new contract wins in the second half.

WLL have invested considerably in developing an Asian presence, and have already picked up some big wins out of Singapore - this is where their medium term growth is going to come from, given their already dominance of the Australian market.

I have also seen research on WLL which suggests it is a very strong takeover target for North American / UK players looking for Asian exposure.

[trackers]

Thanks steve :)

[steve fleming]

An interesting development (and new revenue stream) in relation to WLL subsidiary Dreamwalk Interactive.

Unlikely to be reflected in any forecasts / share price.

No 1 music app in 26 countries and the No 1 app overall in two countries, according to iTunes data.

　---------------------------------------------------------------
Dreamwork Interactive, an Australian mobile app developer, could attract early buyer interest for its music app Jam, said David Williams, MD of Melbourne-based investment bank Kidder Williams.
The fast growth of the app could make it an early acquisition target for companies like ZyngaDreamwalk Interactiv [ZNGA:US], which acquired "Draw Something" app developer OMGPOP for USD 200m in 2012, or "Angry Birds" game developer Rovio, which acquired Futuremark Games Studio for an undisclosed sum in 2012, and is said to be approaching a USD 1bn IPO, Williams said.Dreamwalk Interactive’s Jam app had some 195,000 users in the first week of its release and is the No 1 music app in 26 countries and the No 1 app overall in two countries, according to iTunes data, Williams said. At 99 cents per download, he expects substantial revenue growth in a short period of time, he said.


Dreamwalk Interactive general manager Joseph Russell declined to comment on M&A but said the company is excited about the potential of Jam as such rapid growth in the early lifecycle of apps is unusua

[Lizard]

Thanks Steve - that is good to know! :)

[steve fleming]

Given the large re-rating of small cap stocks with similar metrics recently, WLL has the potential to move significantly once the half yearly is out of the way. They have flagged "the benefit of our new business wins, not taking effect to the second half of this financial year, we are looking at a deterioration of the profit in the first half."

With some positive full year guidance, this may re-rate.

Currrently on PE of 12 and yield of 6%.

I have been trying to pick up some more, but not prepared to pay current prices. Hopefully there will be some selling on the release of their half yearly.

[steve fleming]

Given the large re-rating of small cap stocks with similar metrics recently, WLL has the potential to move significantly once the half yearly is out of the way. They have flagged "the benefit of our new business wins, not taking effect to the second half of this financial year, we are looking at a deterioration of the profit in the first half."

With some positive full year guidance, this may re-rate.

Currrently on PE of 12 and yield of 6%.

I have been trying to pick up some more, but not prepared to pay current prices. Hopefully there will be some selling on the release of their half yearly.

Pretty disappointing half yearly - revenue down materially, which questions WLL's growth prospects.

Dividend remains and still healthy, so this is turned into an income play rather than a growth play for the time being, until retail advertising strengthens.

[trackers]

Thanks for your thoughts Steve (on this and all the other stocks). just missed some ADQ at 0.057 the other day. 8c dividend here starting to look pretty attractive

[percy]

Thanks for your thoughts Steve (on this and all the other stocks). just missed some ADQ at 0.057 the other day. 8c dividend here starting to look pretty attractive

Well I managed to get on board ADQ at 0.063 on 10/1/13.Well positioned for the upturn.!!!!

[steve fleming]

For what its worth. $10m for the Jam App, i'll believe that when i see it.





DreamWalk Interactive, an Australian mobile app developer, has received expressions of interest from potential investors for its Jam for iPhone music app, said a source familiar with the company. Kidder Williams, who assisted the AUD 103m (USD 106m) market cap Wellcom Group [WLL:AU] on its acquisition of DreamWalk Interactive in 2012, has been appointed to assess strategic options for Jam, the source said


While there are no clear guidelines of value at this stage, based on comparable transactions, the Jam app is worth at least AUD 10m, the source said, noting Zynga's acquisition of OMGPop (creator of Draw Something, a social drawing game that lets users guess a word based on a drawing) for USD 200m and Facebook's acquisition of Instagram for USD 1b

[Lizard]

Another one in the "ho-hum" basket. Result in line with forecast and no real guidance as to whether next year will be up or down. Take it as it comes. A bit of value here and plenty of cash, but probably incremental growth only for now.

[steve fleming]

Well, following Fisher Funds becoming a substantial holder, today Milford Asset Management have become a substantial holder as the WLL founder sells down

meanwhile, as the NZ funds take positions, Australian funds continue to avoid it....not sure what that all means

[Lizard]

Yes, I am confused about it too, Steve. Is it just the founder taking the opportunity to distribute while funds are interested? I thought the AGM outlook and statements were reassuring, but I'm somewhat concerned as to whether this is too much of a family business situation and perhaps more of a dinosaur than the blurb they provide suggests??

Holding a few, as there still seems to be value here at current levels ($2.60), but it's not a "conviction" hold.

[Lizard]

Some good technical signs to my casual eye here last couple of days.

Would be nice if they can produce a slightly better announcement and some guidance this half... otherwise I think I'll give up on them!

Currently $2.83.

[Lizard]

Finally a company with a half year result I actually liked (and an acquisition). Was a bit worried WLL would be in with the other strugglers given deteriorating outlook, but result was reassuring. Not expecting fireworks, but should help keep it moving in the right direction... still $2.83.

[noodles]

Apart from the acquisition, what did you l Iike? Npat was much the same as 2h13. Were you happy they did not go backwards?

[noodles]

Finally a company with a half year result I actually liked (and an acquisition). Was a bit worried WLL would be in with the other strugglers given deteriorating outlook, but result was reassuring. Not expecting fireworks, but should help keep it moving in the right direction... still $2.83.

Apart from the acquisition, what did you l Iike? Npat was much the same as 2h13. Were you happy they did not go backwards?

[Lizard]

Apart from the acquisition, what did you l Iike? Npat was much the same as 2h13. Were you happy they did not go backwards?

Yes, given disappointing prior year first half.

I find a simple formula that works well is to invest in stocks that trade on conservative multiples and will grow profits in the coming reporting period. Multiples are easy to find (div 6.36% plus franking at $2.83), but predicting growth is harder. Double digit growth in profit in first half gives a good boost to the probabilities on full year!

Separately, WLL seems good "value" and a good div payer, but I do harbour some concern that it is too closely tied to the founder, Wayne Sidwell. My experiences of second-generation businessmen that got a start in the family business have made me cautious.
Some history re Sidwell family: http://www.theage.com.au/news/business/float-a-wellcom-addition-to-waynes-world/2005/07/22/1121539155943.html

[Lizard]

Sellers backed off and price on the rise, although low volume. Maybe another one being picked for a solid year end div.

On the positive side, I actually encountered them briefly on a project in the workplace recently, so was nice to see some of their staff in action and get another perspective on what they have to offer.

[soulman]

Sellers backed off and price on the rise, although low volume. Maybe another one being picked for a solid year end div.

On the positive side, I actually encountered them briefly on a project in the workplace recently, so was nice to see some of their staff in action and get another perspective on what they have to offer.

Fundamentally, they ticked all the box. They also tell us they are all working very hard and do not do updates on operation. No news for more than 3 months.

[rbel038]

picked up a small parcel to stick in the bottom drawer. Weird thing was getting almost half the order being filled in lots of 5 to 10 shares by ASB???? bot going nuts? My poor inbox