re: telling you all now... go robbo the man Hi xasx,Halcyon, I...

re: telling you all now... go robbo the man Hi xasx,

Halcyon, I believe... at least; will be more of a synergistic and strategic earnings accretive acquisition.

However you are right ...we do not have acess to that Balance Sheet.

However we do know, re this Halcyon purchase; that most of the Halcyon purchase price; and the self interest benefit ....to the old previous vendors... and owners of Halcyon; is tied to the positve and improving upward future performance of the (ITE) Share Price.

They get paid most of their dough;$$$ when the (ITE) goes up-- and also that as to be in various increments over a sustained period... which might give us ... at least... arguably; a two dimensional of potential insight of Halcyon's view of their own impact on (ITE) and the future immediate-thru to medium term term prospects ....

Re: your comments re the 2007 (Financial Year ending in Australia -- June 30-- ) Figures-- I think we need about till end of March -mid April to have a clearer picture to get a better 'handle' on Sales Revenue Growth.

-I will go out on a limb, and say that I predict-- based on the evidence we now have-- (ITE) new Sales Growth --for (2007) will be greater than 350% more ... dollar for dollar in new sales-- than waht was the New Sales Growth in percentage and dollar terms from last year.(2006)

However we do know now; their (ITE) break even for YE: 2006-- NPAT-- was about $ 15 millions annualized last year...and that Costs of running the business--break even point) was trending rather significantly Downward -- (which is great news) ...not up--from the previous year ....

Question: What does this mean..??--

Answer: This to me a great containment of and onOperating Costs to run Business--and that the Capex is not at all high... in fact the reverse--we a dealing with a highly Scaleable Business..

The highly Scaleable (ITE) Business Model -- in the Context of the Global Market Forces (see Porter's 5 Forces Model)-- which ITE are fortuanate to be positioned in; with a immitable Suite ....of globally Trade-Marked and High Barrier to Entry Software Product Solutions ...

I think personally; that this now makes the whole forward (ITE) Profit Margin issue very healthy and positive for (ITE) ivestors) over this next 1- 3- 6 and 12 months....

... ie: What growing (ITE) net profits can (ITE) be realsitically achieiving premium high margin-- ??--

And furthermore; the good prospects that these net (ITE) profits be sustainable .....realistically .... and consistently growing-- going forward--- and what--net profit Free Cash Flow monies drop to the Bottom Line very quickly for the (ITE) Balance sheet, and what this will do for Free Cash flow and the ability to grow qucikly both organically and by making more and more... strategic earnigns accretive acquistions.

--** ** Question:***

Put this simply another way-- Robbo; in your view, Will it&e (ITE) be a Cash Cow Growth Business- and a Market Darling very soon... in all probability...??

Answer: You know my answer.


Okay then, said I would elaborate--before 3pm if possible; and update my last post...

-We are 1 hour early--wow !!

....HERE ARE THEN... my THOUGHTS....


Might be time to consider the main two competitors of it&e (ITE) –

(1) Algorithmics -- owned by the Fitch Group-- was boughtby Fitch only 2 years ago-- and here is another Big Clue --imo-- for approx # AUD 970 millions to $1.1 r-- Billion range --approx-- 23 months or so ago......by the Global Fitch Group of Companies and the 2nd competitor is:...

(2) Sunguard -- I think this is realted to or part of Sun Micro Systems.

Interesting to assess.... whenever -- in the last say .... 2.5 years-- of What %-age — percentage of times --??-- when it&e (ITE) have tendered for a major Bank-- in USA, Canada, Asia, Australia, Scandinavia, UK, France or Germany-- have they lost against Algorithmics or Sunguard...? --

I reckon we would// will find the answer very re-assuring—that is; if your are a (ITE) investor—imo.

Also interestingly-- of the now four/five Banks indicated ....where for (ITE) it is now seemingly only down to due diligence....and/or legal overview of contracts themselves.......

.ie:All to do now; is basically to go over .....simply the legalese ....of the long standing future nature of the contractual relationships envisaged b/w it&e and the Financial Institution and/or Bank -- I believe that this implies that ... yet, again.... these two competitors also have now been knocked out of contention.

(3) You may also be interested to know; that Algorithmics have on my non official research; approx, approx US dollars— $ 110- $123 millions in annual --yes annualized re servicing and licensing fees..

However; imo, this next bit --of my extrapolation assessment; is even.... imo--- more interesting...

From what I am now beginning to gather; a larger// greater majority--??-- of these contractual relationships are now due for re-appraisal and re-negotiation and to be reassessed and re-tendered...etc, etc....

ie: in the next 3- 6 - 9 months (depending on which global Bank/Financial Insto) are come Out of Contract.... fees that of course will be received by whoever proves to now offer the Superior Solution in Risk Credit Management....

The Sun Guard legacy re--also has a similarly interesting situation.... from again what I can so far gather; unfolding .hmmm.....

(4) It would be very interesting to know.... now.... in terms of the reach ‘critical mass time line’ —issue—recently; how many Banks from say: ..... Canada; Asia.... ( Particularly China and Hong Kong and Singapore) ....and also the USA and Europe have now taken the initiative and begun to contact and ring ITE -- unsolicited-- in the last 2 -3 -4 months as well -- ....

(5) Geee, come to think of it-- also wonder whether these Larger Global Risk Management Companies might ever want to buy (ITE) out to make them go away....or to have this Intellectual Property --- nahhh .....guess they would be cool to have (ITE) have the Lion Share of such a small pond ......as all the Major Global Stock Exchanges, Banks and Trading houses.... like Sumitano, Lehman Bros, Soros Global Hedge Funds etc etc etc...as well as all the Commercial Trading Desks in all the Banks, Insurance Companies and Major Global Funds........

Wonder what they might be able to afford....? ....


.....Wonder whether they have already informally offered about 50 cents or even 75 cents, or even a buck...?

Wonder whether this sort of ‘small pond’ -- [ NOT ] --- is worth paying the premium...or whether the NASDAQ listed multinational Software Houses .....could possibly afford about 300 plus mill or so Australian....dollars....?

Guess with all of this Private Equity happening at present there is no global appetite for Mergers & Acquisitions....??

One can see that reading the papers too......hmmmmmm.....(....yeah really Robbo !!.....)

Lots of questions of juicy interest ... that is for sure....


(6) So gets back to that perennial Core issue of:-- Why is it&e (ITE) so superior...again... ?

On my assessment and research it boils down to this:

Two (2) main (in my view only)-- interdependent and LINKED clear Reasons .

Reason One: Computing Power, Accuracy, Configurability (for that Bank’s own SPECIFIC tailored needs)-- and sheer computational Speed of Time required—compared to opposition to perform the mission critical daily Monte Carlo algorithmic Simulations.

Reason Two: 'Real Time Access' for a Bank to monitor and strategize and make decisions in real time based on Real Time Data-- for Billion Dollar Risk and Exposure-- to a multitude of ever changing dynamic positions in/from global trading houses and intra party global monetary, currency and commodity based transactions--both real and in increasingly exotic options/derivatives-- and their related Trading Credit Risk ratios--- measured in Billions and sometimes Trillions of dollars--for both Foreign Currency; Commodity and Hedge Fund Global Transactions..... that operate.... 24/7..... and across Currencies ...


The Computational grunt required by Banks to manage their Risk and Credit Exposure-- is Huge & Enormous-- --and you..... not only really have a High Level of real Need (as a Bank) for the power, accuracy and durability and capacity/configurability of the Risk Management High performance Software –

.... You (The Banks)- also needs—as a Must Have-- the configurability for dynamically changing real time mega huge quantities of streaming data --and the algorithms--based on Gaussian and Bayesian probability theorems to calibrate Probability of these massive Risk exposures-- is therefore all important – like because of the huge dynamically changing all the time-- sums of money involved; mission Critical.

If there is a miscalculation; in this Credit and risk Exposure calculation -- the Loss and Negative effect can be quite devastating.

On the other hand-- if "the HOUSE"-- like the Casino-- gets it right -- in this case the "House" being the Global Financial Trading House or the Bank-- based on the computations of the lay off of the risk and the Huge Volumes traded....the profits are Rivers of Gold.....

A lot of people probably think ......that Large Casino's who also use similar computational risk modeling; ....operate on Huge Profit Margins.

....Not true.

It -- like the Banks and Stock Exchanges situation ( acting ....as 'the house') ---in these daily global derivative and hedge fund transactions-- it is actually very much...a Volume Business .... Small competitive finely calibrated Margins..... but massive constant Volumes....giving the continual profit flows.

It is as real & critical as that.

Simple as that. ...

So what to do now...(imo) ...--????

.....Watch This Space. ....

Kindest Regards,

Robbo .

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