* working capital of $0.12 per share with no LT debt
* multiple light oil well drilling locations in Viewfield, SK
* carried interests with no drilling costs
* natural gas at Pembina – 10-12 additional locations identified
Press Release Source: SelectCore On Tuesday August 31, 2010, 8:00 am EDT
TORONTO, ONTARIO--(Marketwire - Aug. 31, 2010) - SelectCore Ltd. (TSX VENTURE:SCG - News), a provider of prepaid telecom and point of sale transaction solutions announces its financial results for the second quarter ended June 30, 2010.
Record revenues of $31.6 million for the second quarter 2010 represented an increase of 40% as compared to $22.6 million in the same period 2009. The growth was attributable to continued demand for the Company's proprietary point of sale activation (POSA) solution and prepaid products.
Net loss for the second quarter 2010 was $214,738 compared to a net income of $317,630 for the second quarter 2009. The difference was in large part due to a foreign exchange loss of $236,564 in the current quarter compared to a foreign exchange gain of $186,150 in the same period 2009.
"SelectCore has made incremental investments with our recent entrance into the U.S. market," stated Keith McKenzie, CEO of SelectCore, "With increased demand for prepaid in the U.S, we anticipate a significant amount of our growth to come from our US subsidiary."
The Company's Financial Statements and Management Discussion and Analysis for the three months ending June 30, 2010 are available on SEDAR at www.sedar.com.
About SelectCore:
SelectCore is a leading provider of point-of-sale transaction processing and electronic distribution solutions for the prepaid telecom and financial services market. Our proprietary PrepaidONE technology platform and extensive retail network delivers a full suite of prepaid products to millions of credit-challenged and unbanked consumers nation-wide. We also provide wholesale solutions to some of the industry's largest distributors, retailers and telecom providers. SelectCore is a public company on the TSX Venture Exchange trading under the symbol "SCG". We were ranked one of the nation's top 100 fastest-growing companies in 2006 and 2007 and 2009 by Profit100.
Bobwins
Posted: Tue Jun 29 7:04:19 2010
I'm not sure I totally understand your question.
Finances are always a big problem for microcaps. They need money to promote their product, equipment to build the commercial units, inventory to start a new line,etc......
Most common need is for cash because they sold a bunch of product but can't collect for 30 days and need more cash to build more product.
So fast growing companies always need cash. Their typical response is issue more shares. I don't like it but it's a necessary evil as long as it's done at a reasonable price. I hate PP's to insiders or friends and family that are way below market and then are sold into the market and lower or cap the share price.
Consolidation is not a typical response for a company that needs working capital or specific funding for a project. The only time consolidation makes sense is when a company is trying to uplist and needs a higher share price to qualify. Consolidation is a big risk because in the old days, the higher computed price AFTER consolidation rarely held and the share price was soon back down to it's former level with many fewer shares outstanding so a lower market cap. That's not the desired result and existing shareholders get hurt badly.
However Consolidation(Reverse Splits) are getting a better name lately due to the Chinese stocks. In the US, many existing, profitable Chinese companies are being bought by shells with the specific intent to list the companies on the AMex or Nasdaq. They are first traded on the otc markets and then apply for Amex or Nasdaq and do a reverse split to increase share price to qualify. The Chinese companies have typically been operating in China for years and are many times already profitable and established in the Chinese market. The US markets have been selling off so there are fewer recent examples but last year, there were many that actually went up after a consolidation because investors knew that an uplist was coming and the consolidation was one of many steps the company was taking to get ready for the uplist. P/E ratios are typically higher on AMEX or Nasdaq than otc, so investors are eager for otc stocks to uplist.
In the case of Canadian microcaps, I don't think there are many cases where you can look at the financials and say....I think there is a share consolidation coming. You want to examine the balance sheet and look for obvious financial problems and decide if the growth prospects are big enough and the cashflow from that growth are good enough to warrant the financing risk. You have to make assumptions sometimes that the company will be able to sell enough stock to finance their growth. Or in rare cases, that there is some self financing feature to the product cycle, like customer deposits prior to delivery.
In the case of SCG.v, the biggest issue is their skinny gross margin. That is the root of their problems. They are a service company, so construction cost is not an issue. But their main sales item is phone minutes that they are purchasing from a major carrier and reselling to individual consumers. The margins are minute(way less than 10%). So that makes organic growth extremely difficult to self finance. The gross margin isn't big enough to provide enough profitability to use the cash from last qtr's growth to fund this qtr's growth. A company like SCG needs some higher margin products to boost gross margins so they can self finance more of their growth internally.
I thought they had turned the corner but was disappointed by the last two qtrly reports. They have the sales growth. That's not the problem, it's the gross margin. They improved in Q1 so hopefully that improvement will continue and they can get back to profitability and keep introducing new, higher margin products. So a company like SCG that constantly needs money to continue their growth, has a tough time financing the gap. SCG has chosen to do a combination of debt and equity. It's not great terms but if it allows them to finance their way into a big US market and their higher margin products get featured, I think it's necessary.
Again, because they are a service company, their main expense was SG&A. They moved into profitability because they reduced overhead, while continuing to grow the top line. This may have been a short term situation where they temporarily reduced overhead but really can't sustain sales at these levels with the lower staffing. We'll see.
Not sure if I answered your questions. For sure, you have to make a call. Does the financing need appear to curable by private placements, debt or a combination of the two? I honestly don't expect consolidation when I look at a microcap and they have 100 million shares out. Many are at that level and still issuing shares. Ideally the share structure is well below 100 million but it isn't always the case and doesn't always harm a young company. I also invest heavily in junior oil and gas and mining companies. These guys are perennial stock issuers so maybe I am jaded and not as aware as I should be of the dangers. If they hit oil, they can usually get financing for the next set of wells or the pipeline.
Bobwins
Tara
Posted: Tue Jun 29 5:32:08 2010
Bobwins, a couple of things.
First, your answers to Valueman on Oil & Gas are very informative and appreciated by many, I'm sure. I always give a thumbs up to such valuable posts.
Second, I have a question for you. Based on past experiences with penny stocks, I've been screwed with consolidation of the share structure. A little while ago, SCG had a serious working capital deficit(5M$) to overcome, with 100M shares issued, trading at pennies. Did you or do you no never fear of consolidation when financing needs are obvious? Or do you simply this characteristic as enhancing liquidity?
Bobwins
Posted: Tue Jun 15 17:41:10 2010
This appears to be a very relevant product for the immigrant clientele who are a big part of Selectcore's customer base. Sending money home and calling home are two constants. Of course there is a lot of competition and there is no indication of how this will impact SCG.v's revs or profits.
SelectCore Partners With RegaloCard to Offer Free and Instant Replacement for costly money transfer services.
SCG.V 0.05 0.00
Press Release Source: SelectCore On Tuesday June 15, 2010, 8:00 am EDT
TORONTO, ONTARIO--(Marketwire - June 15, 2010) - SelectCore Ltd. (TSX VENTURE:SCG - News), a provider of prepaid telecom and financial solutions for the credit challenged and unbanked consumer market, is pleased to announce that it has entered into a distribution partnership with RegaloCard, a global mobile payments company that has developed a free and instant replacement to costly money transfer services.
RegaloCard, through its proprietary mobile payments platform and unique business model, has created a new product category: the "micro money transfer." RegaloCard allows consumers to send free and instant transfers of as little as $10, directed to specific uses. The RegaloCard service works with any mobile phone and carrier worldwide and is as easy to use as a prepaid calling card.
SelectCore plans to offer RegaloCard to thousands of its retail partners in both Canada and the United States. Ryan Deslippe, President of SelectCore said, "RegaloCard fits well into our distribution model because our retailers are looking for a simple, over-the-counter solution to offer their customers a faster and easier way to send money back home."
RegaloCard is as easy to sell as a prepaid phone card which opens up the market to thousands of retailers that do not offer a money transfer service today. This agreement is the first to expand RegaloCard's distribution footprint outside the US and continues the company's focus in making the RegaloCard micro money transfer service as easy to purchase and as ubiquitous as calling cards.
Gregory Keough, Chairman and CEO of RegaloCard, stated, "There is certainly a demand for our product among Canadian consumers and we are happy to be partnering with SelectCore who is a recognized leader in the prepaid industry. SelectCore's rapid growth in the US will also add several thousand points of sale to the RegaloCard distribution network by the end of 2010 which makes this partnership even more exciting."
About RegaloCard: RegaloCard is a global mobile payments company that has developed a free and instant replacement to costly money transfer services. RegaloCard, through its proprietary mobile payments platform and unique business model, has created the "micro money transfer" allowing consumers to send instantly and for free as little as $10, directed to specific uses, while earning a greater margin then traditional money transfer companies. RegaloCard is a prepaid gift card that immigrants can buy in the United States, but is delivered instantly to the person chosen in the immigrant's home country, to make purchases at leading local retailers. The RegaloCard service works with any mobile phone and carrier worldwide and is as simple to use as a prepaid calling card.
About SelectCore: SelectCore (www.selectcore.com), is a leading provider of point-of-sale transaction processing and electronic distribution solutions for the prepaid telecom and financial services market. Their proprietary PrepaidONE technology platform and extensive retail network delivers a full suite of prepaid products to millions of credit-challenged and unbanked consumers nation-wide. They also provide wholesale solutions to some of the industry's largest distributors, retailers and telecom providers. SelectCore is a public company on the TSX Venture Exchange trading under the symbol "SCG". SelectCore was also ranked one of Canada's fastest-growing companies in 2006, 2007 and 2009 by Profit100.
This news release contains projections and other forward-looking statements regarding future events. Such statements are predictions, which may involve known and unknown risks, uncertainties and other factors, which could cause the actual events or results and objections to differ materially from those expressed.
For further information visit www.selectcore.com.
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact:
Keith McKenzie
SelectCore Ltd.
CEO
investor@selectcore.com
www.selectcore.com
Bobwins
Posted: Tue Jun 1 7:21:59 2010
Q1 showed increased sales of 20.7 million vs 18.2 last year. However gross margins continued to contract at .0524 vs .058. The big difference was the fees and charges for the line of credit and term loan. The company had to issue 4 million shares and pay cash loan fees totaling 716K, which was almost all of the loss of 737K.
Last year, SCG showed profits in Q2 and Q3. There could be some seasonality to their business that affects margins positively during those two qtrs. We will find out in a couple of months.
SCG has introduced several new products that may take time to gain traction in the marketplace. Because of the high volume/low margin business model, the initial stages of selling a new product are likely loss generators. We need to see more sales that move these new products past breakeven and an overall return to profitability. Based on Q1, they are close to breakeven and need improvements in gross margins to move back into the better numbers we saw mid last year. Of course, they will have tougher comparables in Q2 and Q3 so they will have to do better to impress.
There was the first sign of a currency loss this qtr. I am worried about any advances into the US without some form of currency protection. No hint in the PR about that.
Overall slightly disappointing. The loan fee costs are somewhat unavoidable and probably put a cap on future price rallies as the lender will likely be selling into any good rallies with the 4 million shares. SCG needs to have their new products generate meaningful sales and improve gross margins. We will have to wait for Q2 to see signs of improvement.
Bobwins
Posted: Sun May 2 20:15:20 2010
Q4 broke the string of increasing sales and profits. They lost 296K in Q4 or .003. TTM eps of .004 was a huge improvement from 2008 but SCG.v definitely needs to post improved results for Q1 2010 to get back on track.
It's definitely not undervalued at current prices and the most recent qtr's results. There was no verbage in the MD&A to expect instant improved results but to be fair, there was a dip in Q4 sales in 2008 also. Q2 and Q3 appear to be strongest qtrs for sales.
It also appears that gross margins were squeezed in Q4. This is crucial because Selectcore operates in a very low margin business with their phone cards. Most of the sales revs are used to pay the phone companies for the wholesale minutes purchased. Selectcore earns a small markup for selling the card.
This is the area that Selectcore needs to show immediate improvement or positive earnings will be difficult to attain. The company told us that they intend to introduce higher margin products to increase gross margins. They introduced several such products in the new Mastercard and the international topup minutes products. They are so new, it is hard to believe that they will immediately make an impact on Q1 but hopefully they will show improved margins so that when sales pick up, they will improve gross margins.
I was disappointed in Q4 and we will have to wait to see if Selectcore can resume the profitable growth shown in Q2 and Q3 2009. Selectcore still has promise due to the new products they have introduced and the possibility that they will expand into the US markets. Also the new loan is denominated in US$ so it is likely that there will be future positive additions to net income from the strength of the C$ vs the US$.
jude
Posted: Sat May 1 5:14:56 2010
bobwins/smithgee,
Curious to have your take on SCG's year end numbers (released Thursday). EPS of approx. $0.004 if I've done my math correctly. Revenue continues to show growth. Do you still believe the co. to be undervalued at current levels?
RETRANSMISSION: SelectCore Announces Record Financial Results for 2009
Friday, April 30, 2010
TORONTO, ONTARIO--(Marketwire - April 30, 2010) - SelectCore Ltd. (TSX VENTURE:SCG), a provider of prepaid telecom and financial solutions for the credit challenged and unbanked consumer market, is pleased to announce record results for the Company's audited financial statements for the year ending December 31, 2009.
Financial highlights:
-- Revenues increased 21% to $84.4 million over 2008
-- Gross profit increased 15% over 2008
-- Adjusted EBITDA increased 1,215% over 2008
-- Net earnings increased $8.3 million over 2008
-- Working capital position improved 15% over 2008
-- General and administrative expenses decreased 7% from 2008
-- 6th consecutive quarter of positive financial results
Revenue for the year ending December 31, 2009 totaled $84,448,174, an increase of $14.74 million or 21.1% compared to $69.7 million for the year ending December 31, 2008. Sales have continued to increase year over year due to the market demand for the Company's proprietary PrepaidONE point-of-sale solution for the sale of prepaid telecom products.
Gross Profit for year ending December 31, 2009 increased 15.50% over 2008 to $4,785,225. Adjusted EBITDA for the year ending December 31, 2009 was $1,021,389 compared to $77,629 for 2008, a significant improvement of 1,215%. Net Earnings for the year ending December 31, 2009 was $430,934, a significant improvement of $8,315,500 compared to the same period 2008.
Bobwins
Posted: Thu Apr 15 8:26:26 2010
SCG.v starting to wake up +.01 to C$.09.
Hoping that year end report shows continued growth in revs and eps.
New financing will provide some extra capital for company's new products as well as preliminary steps to expanding into the US.
Selectcore is on pace to dramatically increase gross revs for 2010, growing in spite of the slow economic background. This ability to grow in good times and bad is very appealing to me. In addition, company has told us that they are in good enough financial shape to expand their product line to higher margin products beyond the phone cards. That should mean higher gross margins and profits.
They have a price target of C$.35 to C$.40 for SCG.v for the next 12 months.
Bobwins
Posted: Tue Mar 30 15:30:04 2010
SelectCore Completes US$5,000,000 Financing With Comvest Capital
TORONTO, ONTARIO, Mar 30, 2010 (MARKETWIRE via COMTEX News Network) --
SelectCore Ltd. (TSX VENTURE: SCG) (the "Company") announced today that it has entered into a debt financing arrangement for up to US$5,000,000 with Comvest Capital II, L.P. ("Comvest").
The financing consists of a revolving line of credit of up to US$2,500,000 and a US$2,500,000 term loan. Both facilities mature in 36 months. The revolving credit line bears an interest rate equal to the greater of prime plus 3% or 9% per annum while the term loan bears an interest rate of 12.5% per annum. At Comvest's option, it may convert up to US$1,000,000 of the term loan into common shares ("Common Shares") of the Company at a price of CDN$0.20 per share. The applicable Canadian-US dollar exchange rate in effect on the date of Comvest's applicable conversion notice will be used to determine the actual number of Common Shares to be issued in respect of such conversion. The financing is secured by a first lien on the Company's assets and those of its subsidiaries.
In connection with the financing, the Company has issued Comvest 4,000,000 bonus Common Shares (the "Bonus Shares") and paid Comvest closing/bonus cash fees of an aggregate of US$390,000. In addition, Comvest has acquired 5,809,523 outstanding Common Shares (the "Purchased Shares" and together with the Bonus Shares, the "Comvest Shares") currently held by the existing lender to the Company. The Bonus Shares and any Common Shares issuable upon conversion of the term note will be subject to a hold period ending July 30, 2010.
Among the other terms of the loan facility, Comvest has the option to require the Company, subject to compliance with applicable Canadian and/or United States securities laws, to repurchase any or all of the Comvest Shares at a price of CDN$0.14 per share (the "Repurchase Price"). However, if the Company is unable, pursuant to applicable Canadian and/or United States securities laws, to repurchase the Comvest Shares, Comvest may sell such shares to one or more purchasers (each a "Third Party Sale"). In the event that the sale price for the Comvest Shares received pursuant to a Third Party Sale (the "Third Party Sale Price") is less than the Repurchase Price, the Company shall pay Comvest an amount equal to the difference between the Repurchase Price and the Third Party Sale Price. Comvest may exercise this right on the maturity date of the revolving credit line (March 31, 2013) or such earlier time as the obligations under the loan agreement are prepaid or required to be prepaid.
In addition, the loan agreement with Comvest requires that the Company obtain Comvest's consent in order to issue any equity securities (or any rights or securities exercisable, convertible or exchangeable for any such equity securities) at a price less than CDN$0.10 per Common Share (other than pursuant to certain previously issued securities or rights) while any obligations to Comvest are outstanding pursuant to the loan agreement.
The net proceeds of the financing will be used to retire the Company's existing US$2,500,000 debt facility early and pay off certain accounts payable and otherwise for working capital and other general corporate purposes.
Keith McKenzie, CEO of SelectCore commented, "We are very pleased to have partnered with Comvest and feel we have chosen the right partner to help finance the Company's growth."
About SelectCore:
SelectCore provides prepaid telecom, prepaid financial and transaction-based POSA (point of sale activation) solutions utilizing its own network infrastructure and proprietary technology. SelectCore connects its customers with prepaid products and services through its nation-wide distribution channel of thousands of retail convenience and grocery store locations. Profit 100 ranked SelectCore as one of Canada's fastest-growing companies in 2006 and again in 2007.
About ComVest:
The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to lower middle-market companies with enterprise values of less than US$350 million. Since 1988, The ComVest Group has invested more than US$2 billion of capital in over 200 public and private companies worldwide.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the Company's debt financing arrangement with Comvest and the Company's future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks related to market and financing conditions as well as risks associated with the prepaid telecom, prepaid financial and transaction-based point of sale activation industries, changes in project parameters as plans continue to be refined as well as those risk factors discussed in the Company's management's discussion and analysis for the period ended September 30, 2009, available on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information contained herein, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: SelectCore Ltd. Ryan Deslippe President (905) 752-0352 investor@selectcore.com www.selectcore.com
Bobwins
Posted: Wed Mar 17 9:30:04 2010
SCG.v C$.07 My favorite nanocap has a paid research report from eResearch out.
Forecasting sales to increase from 90million in 2009 to 134million in 2010 with .055eps. They have a target price of .35 to .40 for the next 12 months.
They are banking on the new Iridium Mastercard to increase sales and margins. They also mention the expansion into the US but we have no details yet from the company about details and timing of that move.
I think they are being somewhat optimistic about the impact of the Iridium prepaid Mastercard but SCG.v has demonstrated excellent growth, even during the recession so they may be right.
I certainly would accept C$.35. We'll see how Q4 and Q1 look in a few weeks.
Bobwins
Posted: Mon Feb 22 10:16:39 2010
Moving on up! SCG.v +.01 to C$.085 Good volume and waiting for news on what they have going in the US!
Bobwins
Posted: Fri Feb 19 10:16:41 2010
ok, I chased it a bit today and am done buying SCG.v. Even at .07, SCG is selling at less than 3X fwd eps. Company is profitable, just launched a nice prepaid Mastercard product in 4,000 retail locations and is looking to expand to the US.
Bobwins
Posted: Wed Feb 17 7:42:31 2010
Wow! This could be big news for SCG.v. If Canada is a good market for prepaids, just think how big the US markets are. The POSA platform is the key, although there must be similar software in the US. I have bought prepaid cards from retailers in the US and preloaded cards with whatever amt I wanted at the cash register. More questions to ask IR. Bobwins
SelectCore Announces Expansion Plans for US Market and Appointment of US Financial Executive to its Board of Directors
TORONTO, ONTARIO, Feb 17, 2010 (MARKETWIRE via COMTEX News Network) --
SelectCore Ltd. (TSX VENTURE: SCG) is pleased to announce the company's intent to expand into the US market and the appointment of Randy Khalaf to the company's Board of Directors.
SelectCore plans to leverage its existing network platform and infrastructure to support new business opportunities while mirroring its PrepaidONE POSA solution that has already attracted the attention of several potential US clients. Management plans to release more details in the coming weeks.
"Expansion into the US market is a natural progression for SelectCore" commented Keith McKenzie, CEO of SelectCore. "We see a tremendous opportunity to deploy our technology in a sizeable market that has a growing consumer demand for prepaid telecom and financial products."
Mr. Khalaf brings over 15 years of senior level financial experience that will help the company structure and plan for its expansion into the US market. Since January of 2008 Mr. Khalaf has held the position of Chief Financial Officer for UGN Inc., leading all financial, audit, IT, risk management and treasury activities. From 2003 to 2007 Mr. Khalaf was the Financial Director at GKN PLC. There he was responsible for new program costing and capital spending for international operations. Prior to this, Mr. Khalaf held senior level finance and accounting positions at Ford Motor Company and The Limited.
"Mr. Khalaf's experience and knowledge are a welcome addition to our board" said Martin Bernholtz, Chairman of SelectCore. Mr. Khalaf commented "I am pleased to be joining the board of directors at such an exciting and pivotal time in the company's history. The future looks bright for SelectCore with its continued growth and expansion into the US market and prepaid financial services space."
The company also announces that it has accepted the resignation Peter Burdon, former Chief Financial Officer. Management thanks Peter and wishes him the best in his future endeavours. Jannet Wang, Senior Controller of SelectCore will be assuming the role of CFO.
About SelectCore:
SelectCore (TSX VENTURE: SCG) is in the business of providing prepaid telecom, prepaid financial and transaction-based POSA (point of sale activation) solutions utilizing its own network infrastructure and proprietary technology. SelectCore connects everyone with prepaid products and services through its nation-wide distribution channel of thousands of retail convenience and grocery store locations. Profit 100 ranked SelectCore one of Canada's fastest-growing companies in 2006 and again in 2007. SelectCore is listed on the TSX Venture Exchange under the symbol SCG.
This news release contains projections and other forward-looking statements regarding future events. Such statements are predictions, which may involve known and unknown risks, uncertainties and other factors, which could cause the actual events or results and objections to differ materially from those expressed. The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: SelectCore Ltd. Keith McKenzie CEO investor@selectcore.com www.selectcore.com
SOURCE: SelectCore
mailto:investor@selectcore.com http://www.selectcore.com
Copyright 2010 Marketwire, Inc., All rights reserved.
This is a paid research report on Selectcore. No target price and they didn't emphasize what I think is important......that Selectcore is aggressively increasing revs and profits during one of the worst recessions in decades. Can't wait to see Q4 to see how the company did during the holiday season and how much impact the new major retailer had on Q4 and forward.
The Iridium Mastercard rollout should have minimal impact on Q1 but should begin to show in Q2. I would expect this will take some time to gain momentum. Just like phone cards, it's a long term momentum issue. You need to sell lots of cards to generate the upfront fees but to really increase profits, you need the big existing client base that continually reloads their card. No more marketing expense, just the small expenses to enter the transactions.
Also I am sure they are hoping to sign up most long term users under the "registered" format that creates a monthly fee for holding the card. The more cards they sell, the more fees will begin piling up. This should be a very lucrative program for them but will take time to build the customer base and recurring revs.
Still feeling extremely positive about SCG.v. Need confirmation of continuing positive trends but we could be close to a breakout. Move up to .06 on good volume could lead to another pullback to .045 or we could break thru and move upwards from here. It might not happen until financials but hope springs eternal!
Bobwins
Posted: Fri Feb 12 7:40:21 2010
nice pop to .065 on 539K volume. I wasn't done buying yet but happy to see the green! I doubt there will be a big run on this stock until we see Q4 and Q1 financials. But I've been wrong before. It could happen again and again!
Still less than 3X last qtr's fwd annualized eps of .006.
Bobwins
Posted: Thu Feb 11 10:08:00 2010
Added some more at .045. I think scg.v could be a great way to play the poor economy. Times may be tough but people still consider phones and convenient purchasing as necessities. Prepaids are going to gain traction as automatic budgeting devices.
I have about equal amts of npa and scg. Npa.v seems to have lifted off so will try to nibble away at SCG.v as long as it's near my avg price of .05.
Bobwins
Posted: Tue Feb 9 12:50:38 2010
https://www.iridiumcard.ca/ReloadingYourCard.aspx
Multiple ways to reload the card. The direct deposit of a paycheck looks like a very convenient method and doesn't have any fees. The 3.99 initial card fee plus the 1.99 reload fee seem pretty reasonable versus a low balance checking acct.
I was a banker and anyone with a low balance always ran the danger of overdrawing their acct and got penalized severely with potentially hundreds of dollars in fees for one mistake.
This is a much more economical way for someone who doesn't keep track of their money.
Bobwins
Posted: Tue Feb 9 12:45:43 2010
This must be one of the higher margin products they mentioned in the last earnings PR. Depending on how easy it is to reload the cards, this could be a nice recurring revenue stream for SCG.v.
Press Release Source: SelectCore Ltd. On Tuesday February 9, 2010, 12:14 pm EST
TORONTO, ONTARIO--(Marketwire - Feb. 9, 2010) - SelectCore Ltd. (TSX VENTURE:SCG - News), a provider of prepaid telecom and prepaid financial services, is pleased to announce the launch of Iridium MasterCard - Canada's first prepaid reloadable card sold to consumers through retail locations.
The Iridium Card is sold for only $3.99 and can be used instantly. There is no credit check or bank account required and the card can be reloaded over and over again up to a $5,000 balance. The Iridium MasterCard is accepted at over 28.5 million locations worldwide and online. Cardholders have complete control of their funds with online account access, text message alerts, bill pay, money transfers, ATM access and more. Customers can even have their paycheck deposited directly to their card on payday.
"The Iridium Card is a bank for the un-banked" said Keith McKenzie, CEO of SelectCore "from direct deposit to bill payments, ATM access and more, its just like having a checking account".
The program will be rolled out to over 4,000 retail partner locations across Canada this year, creating the nation's largest reload network for prepaid cards. SelectCore's proprietary processing platform and POS terminals deployed at these locations allow the cards to be activated and reloaded in real-time.
"Iridium MasterCard is the perfect solution for millions of un-banked and credit-challenged Canadian's who are looking for financial freedom. It's also a great alternative and budget tool for consumers that are paying high interest charges on traditional credit cards." commented Ryan Deslippe, President of SelectCore.
"SelectCore is now diversifying and expanding into the high-margin prepaid financial services industry, opening the door for many new opportunities" said Keith McKenzie, CEO of SelectCore.
To learn more, or get your own Iridium MasterCard visit www.iridiumcard.ca.
About SelectCore:
SelectCore (TSX VENTURE:SCG - News) is in the business of providing prepaid telecom, prepaid financial and transaction-based POSA (point of sale activation) solutions utilizing its own network infrastructure and proprietary technology. SelectCore connects everyone with prepaid products and services through its nation-wide distribution channel of thousands of retail convenience and grocery store locations. Profit 100 ranked SelectCore one of Canada's fastest-growing companies in 2006 and again in 2007. SelectCore is listed on the TSX Venture Exchange under the symbol SCG.
About MasterCard Worldwide:
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. Follow us on Twitter: @mastercardnews.
This news release contains projections and other forward-looking statements regarding future events. Such statements are predictions, which may involve known and unknown risks, uncertainties and other factors, which could cause the actual events or results and objections to differ materially from those expressed. The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact:
Keith McKenzie
SelectCore Ltd.
CEO
1-866-464-0343
investor@selectcore.com
www.selectcore.com
Bobwins
Posted: Tue Feb 9 12:40:07 2010
added a final dose of SCG.v at .045 today. Probably won't get much movement until Q4 and Q1 reports come out in a month or two. Obviously expecting a continuation of the positive trends of 2009. Higher revs and improving gross margins while limiting expenses has been a winning formula for Selectcore.
Bobwins
Posted: Thu Jan 21 10:31:30 2010
added more SCG.v today at .05. Dirt cheap and growing in sales and eps. Selling at a fwd p/e of 2 with a big new retailers selling prepaid minutes. Should have a positive Q4. Will be awhile for 2009 financials but like this company in a tough economic environment.
Bobwins
Posted: Thu Jan 7 8:47:00 2010
Added to SCG.v today at .055
SCG.v earned .006eps for Q3. Forward eps is .024 vs .055 or 2.3 X forward earnings.
SCG has been increasing top and bottom line for 5 qtrs.
Here are the annual revs for 2005 thru 2008
24million, 37 million, 48 million, 70million.
They are on track for 86 million in 2009.
Restructured last year losing 5,565,000 in Q4 2008.
Since then net income for Q1,Q2, Q3 is -186K,+318, +595.
Gross margins are improving. They are selling higher margin products. They cut SG&A.
Selectcore sells prepaid telecom and financial services for people with bad credit and without regular bank accts. The key is that they sell their products thru big retailers by providing a Point of Sale product that can be incorporated into the client's cash register system so that activation is done as soon as the customer pays. The retailer doesn't have to pay for any inventory and yet still earns a commission on the sale.
Certainly with the tough economy, these kind of products are going to be popular and be counter cyclical.
In October Selectcore made two significant announcements.
They signed a new 3 yr deal with Telus so they will continue to provide Telus with long distance switching and POSA(point of sale activation) for Telus phone cards.
They announced a new 3yr deal with a major Canadian retailer who will sell prepaid minutes for Canada's top wireless brands in real time with no inventory requirements as well as selling prepaid long distance cards.
Since the deal was signed in October, SCG should benefit from the new business during the just finished holiday season.
Liquidity is a problem for SCG.v and even after the great Q3, the stock spiked on huge volume to .08 and has dropped back to the .05-.06 range.
I think it will take a couple more solid qtrs for investors to believe in the Selectcore story. In addition, 2009 will be profitable for the whole year and so the audited results for 2009 will also convince more investors that SCG has turned the corner. Bobwins
Bobwins
Posted: Wed Dec 30 10:19:41 2009
Finally lost patience and paid .06 for a position in SCG.v.
They made .006 last qtr and have been consistently increasing revs,increasing margins and holding down expenses. Fwd eps of .024 vs .06 looks like a bargain to me.
This is a commodity business and so expense control is crucial. The one redeeming quality about SCG is their
proprietary POSA technology that gives their retail partners the ability to electronically sell prepaid airtime PINS for Canada's top wireless brands in real-time with no inventory requirements. They have some big name retailers as customers.
In their last earnings PR, they said they are ready to introduce more high margin prepaid products.
Trading still sucks and liquidity is questionable but this company seems to be on the right track to improved business results. Bought a small position and will hold for a couple qtrs to see if my hunch is right. Bobwins
Tara
Posted: Thu Oct 29 9:51:55 2009
Bobwins, you need spare change for a coffee?
P.S. you "fat cat" you...
Bobwins
Posted: Thu Oct 29 8:15:10 2009
I like this stock but am out of cash. Will do some more DD. This is a commodity business but their deals with retailers could keep them growing. Thanks. Bobwins
Gee
Posted: Wed Oct 28 8:40:30 2009
Q3 came out today and they have did over $500K in earnings and that was on top of the $300K they did in q2 ... going forward they look to continue the revenue/earning.
SelectCore is in the business of providing prepaid telecom and transaction-based POSA (point of sale activation) solutions utilizing its own network infrastructure and proprietary technology
I have been buying in the .045 to .06 cent range as it appears very undervalued to me.
