2003

23/03/03

Once again I will have skirt around the subject of one of my holdings because of the situation surrounding the company itself.

This leaves me free to announce my stake building in the voice recognition business Vocalis.

I have purchased 2,150,000 shares in the company after its recent fall to new lows in the last few weeks. The depressed share price of 1.5p is a fraction of the £10 that they stood at during the heady days of the dot com debacle. They continue to lose money and recently warned that second half revenues would not in fact reach the levels previously stated.

They face a difficult market and it doesn't look like it will be getting that much easier in the near future either. So why start buying?

To my way of thinking, most of the donkey work has now been done. The technology has been developed and proven, the market place has been defined and the potential customers are very interested. This all sounds great but it could be said about many of the former high tech darlings that will never achieve that state of nirvana that is profitability.

It's early days yet and I will be taking my time in building up my stake but it will depend very much on the amount of liquidity in the market. Like all small companies shares the market is pretty tight but I am hopeful in taking a decent stake.

First Property Online will be reporting at the end of this month and the rumour mill has that a maiden profit is on the cards!

News and Comment

It should be quite easy to update the site nowadays as it mainly gravitates around three stocks. All three have been very active since the last detailed update. No preferences, so I'll start in alphabetical order.

First Property Online - FPO

FPO reported their first "operating" profit and stunned me with a maiden dividend. The black and white figures are the last to be littered with the goodwill write-off's, so reported losses were recorded.

I am glad that I was persuaded to remain a FPO holder when times looked their worst. My dislike for everything dot com blinded me from the fact that Alastaire Locke had in fact found a gem to reverse into the  cash shell Hansom. FPO is now a nice little cash generator with cash in the bank and a management team who intend taking full advantage of the systems it has devised for property trading, underwriting, property database and asset management.

I don't think for one minute that it will rest there. Ben Habib and his team are dropping the "online" tab from the name. This is not only to disassociate the company from the dot com "yolk". The "Group" name reflects the change in the actual business from the days of it being an online estate agent come auction house to an interwoven business unit that aims to provide users with a "one stop shop" to buy and sell investment property. The group is firing on all cylinders but it has to be said the certain units are at an earlier stage of development and therefore provide less of the profits.

The business, going forward, is in very good shape. The management are more than capable of taking the company forward and lead from the front in buying the up the shares. I see FPO as a much larger entity a few years down the line, that's assuming they stay independent. It has been difficult at times to remain positive about FPO's prospects but now I can be considered a more than happy holder.

Ffastfill - FFA

This company has cost me more in time than in any other company that I have ever held shares. The situation into which I became embroiled revealed a side to the market that may be fun for some but I found highly unprofessional.

The company was in a tail spin. The company was dogged by poor management, it was haemorrhaging cash at an unsustainable rate and the customer was less than impressed. A lot of hard work by the workforce and trust by the customer was in danger of being undermined. Against this background, Keith Todd and his team arrived and were elected as the executive. I had begun buying just prior to all this activity and looked forward to a stable management  taking the reigns. The situation soon became clear once I had reached the "declarable" stake point, that all was not well and there were serious fault lines in the shareholder base. This ended in the non-EGM.

The sole reason I made the decision to change my direction was the effect on the business. Changes had to be made to both the line up and level of management remuneration. Agreement amongst shareholders was reached on both issues and we can all sing from the same hymn sheet.

My position is that I fully back the current management team. I believe that Keith Todd has made the necessary changes to the business to see it to profitability. The business plan is one that I can understand and agree with. As with FPO, I believe that FFA are a business going forward but not necessarily at the same stage of market recognition.

Vocalis - VOC

How do you dress up a disaster, especially one of this magnitude. So for a start I am not even going to try. The decision to invest in VOC was flawed at the start.

The company is lacking what is at the basis of all businesses, business! They haven't secured any new orders of significance since March and cash is running out. It would appear that there is only about 3 to 5 months cash left. The management are looking at "strategic options" for the company. It's hard to put a value on a situation like this, my personal view is that about £100k plus the listing.

The collapse in the share price came as a nasty shock, as did the results. I am tied into this share for good or ill, to start to unwind the position would kill the price. If by some miracle the management pull the phoenix from the flames, I might get out my stake but to be on the safe side I will be writing off my entire stake.