The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Main market gets 4 months I believe and I imagine WGP will use every single day of that. Might not be a profit yet but they should finally be able to report strong revenue numbers. They were listed on Frankfurt for 9 months of 2011 (and in 2010) plus 5 weeks on LSE and raised funds in 2010 and 2011 (£860K in 2011 pre-LSE) and with full years for Jarvis, Ladbrokes, I-mobilemarkets (IDC), Worldspreads and co, you would think that they will finally be reporting revenue in the low millions or at the very least high hundreds of thousands. Will be interesting to see. To be honest, I would settle for revenue higher than the MDs salary for once. £1M plus revenue would be a very good result IMO.
And there's me thinking it was just me and Base left on the Board! So, what is the consensus then on the RNS? We knew it was coming after the pre-action letters but nice to see it finally arrive. Interesting they have gone for a big one. City Index might not be that well known compared to Ladbrokes etc but I think these are owned by Michael Spencer who is very powerful and has pretty much unlimited resources at his disposal. If WGP win this, the precedent will be very strong IMO. All the other players will know who Spencer is so to defeat him publicly or force him to settle would be huge. Ballsy to state this "comes after communication with the infringing company". I think someone forgot to say "alleged" in the PR bit as its pre-trial! My take is this is positive as it will decide the future of the UK patent one way or the other and it definitely isn't Acme Trading. If you're going to prove yourself, might as well do it against a big dog. Surprised we are not looking at 35p + on share price, much bigger than OMT announcement.
Still think the same really as I have done since 2007. Long term is a potential big win. If they get a bona fide patent license from a real name (William Hill, Ladbrokes, IDC/Esignal, TD Waterhouse, Saxo etc), this would soar past the IPO price in my opinion but I've been saying that since 2007 and thinking it might never happen now. However, IF they can set a big name precedent, they will finally start to release big value. There is a growing feeling though that the patent is not enforceable in a court so feeling a bit negative on it personally but I have ups and downs on that. Irrespective of the above, you can still make money on the price movements in the 10p to 60p range. The OMT PR popped it from 23p to 57p and who wouldn't complain about a 100% plus rise? Paros out of the way is the BEST news for ages because Paros were going for an amount of money that would have put WGP into a winding up order if they'd won so the big threat on the horizon is gone completely. My only fear short term is the last two PR releases did not pop the share price when each RNS used to. Plus a dominant buy volume for the week which isn't giving upward momentum to the price. As the Broker now concluded, it has a potentially highly geared return but also accompanied with a high downside risk.
See below on why WGP only had to pay the £150K cap not the extra Paros wanted. "The High Court held as follows: There was no reason why the change in deal structure from a share purchase to an asset purchase should affect the costs undertaking. The parties had chosen to vary the heads of terms in one respect and could have varied it in others, had they wished to do so. They did not do so. The agreement by Worldlink, a public company (without material net assets), to pay Paros's costs or a break fee in the contemplation of an acquisition of shares in Worldlink was unlawful. The agreement amounted to 'other financial assistance', contrary to what are now sections 677(1)(d) and 678 Companies Act 2006. However, the unlawful element of the contract was merely unenforceable, not void. It followed that, when the heads of terms were varied so that a share acquisition was no longer contemplated, the costs provisions ceased to be unenforceable. Because Worldlink never re-registered as a private company, the break fee provision applied, meaning Worldlink was liable to pay only the capped amount of £150,000. The discussions by Worldlink's directors with professional advisers relating to possible alternatives, such as an AIM listing of Worldlink, did not breach the exclusivity undertaking. However, to the extent that such discussions went further so as to contemplate direct investments in Worldlink by third parties (as they probably did in March and definitely did in May), the exclusivity undertakings were breached. However, the breaches of exclusivity did not cause the failure of the transaction. The transaction failed because of personal differences of opinion and expectation between the representatives of Worldlink and Paros. Nominal damages of £2 were awarded for each breach." There is a nice analysis at http://www.wragge.com/analysis_8501.asp WGP lawyers argued a very good case I think.
I think it was a Paros document as it was technically an acquisition by Paros but reclassified as a reverse takeover. It is a good indication that Worldlink's solicitors are on the ball though (both the drafting ones in 2009 and their legal counsel in 2012). The wording was obviously watertight on the cap.
"Worldlink Group Plc, (LSE: WGP) the UK listed Company with gatekeeper patents on providing changing data in real time for mobile devices are pleased to announce that they have concluded their case against Paros where the Court ruled that the cap of £150,000 did apply, although Paros had claimed otherwise. Worldlink also secured a costs order in their favour." Only £150K to pay out is good as Paros wanted £700K-£1.2M. That is the biggest negative out of the way. Odd that having a judgement against you for £150K is good news but I guess in the scheme of things, everyone was worrying about the cap being held invalid. With Paros and OMT out of the way, no real threats on the horizon.
Paros suing them for somewhere between £700K and £1.2M for costs associated with Worldlink allegedly pulling out of the reverse AIM takeover in 2009. It has been heard in the High Court (Admiralty and Commercial) this month and pending a decision. In the prospectus WGP posted, they do mention it but claim a £150K cap on the liability in any case but of course that would not be valid in a repudiatory breach. A WGP win would be genuine cause for celebration. A defeat at the Paros numbers would be a catastrophe. Google it. It is in the WGP listing prospectus here: http://www.worldlink-products.com/wp-content/uploads/2011/11/Prospectus-FINAL-CLEAN.pdf See page 112.
Or knowledgeable about this company. You don't seem to want to know what is going on unless it is something ridiculous like Ramsgate with their 200 home supporters will save the day for WGP. Want people to ignore anything before Feb 2012. You are talking about a share right now that is one of the worst performers in main market history. £2.50 to 12p in less than 10 weeks. I am not obsessed but a bit bitter yes. You are absolutely deluded. This company has been going 10 years plus and made less revenue last year in the entire year than you earn in a month. What planet are you on?
progress on what fronts? September 2011 is hardly the past. November 2011 at £2.50 is hardly the past. January 2012 at 12p is hardly the past. Feb 2012 at 57p is hardly the past. Neither is 21p today. In the two years since the big fanfare around their Frankfurt listing (valued higher than the LSE one), no licenses, no settlements, being sued, cannot draw down their credit line, signed Ramsgate. What progress?
It is a tough one because WGP can (and WLO1.F last year) show decent high percentage pops on minimal RNS releases so I am a believer that people will get a better chance to get out. However, I will point out despite the protestations of other people that WGP in the past has been like a game of reverse pass the parcel. It is the person holding the parcel when the music stops that loses. The Frankfurt listing ended only 6 months ago. September 2011. This is not ancient history.