AT Communications Share Discussion Threads

[staymour] 24/3/2009 08:26

Yep a good combination ..... low or no debt plus a profitable growing business.


Working my way through the accounts to discount the Rocom effect.

Wonder if the recent steady seller will now return to graze in the juicy pastures of 14p a share lol

[jwe] 24/3/2009 08:13

The point is there was a real possibility of this company going to the wall by being swamped by debt in this credit squeezed market.That is no longer the case imo

[staymour] 24/3/2009 08:06

Initial mark up is a positive sign.

Will need to study the accounts to figure out the likely new profit levels.

But the reduction in net debt and therefore interest payments will be most welcome.

[masurenguy] 24/3/2009 08:04

You're absolutely right jwe - I was looking at my past notes on the interims and overlooked the year end update in January. Results must be due any day now so we should get a more accurate and up to date position soon.

[jwe] 24/3/2009 07:58

M-Net debt should reduce from £18m to £6m immeadiately with a further 0.5m later.I would say net debt should currently be around £5M.Net debt came down by £4M in the last 6 months with Rocom(presumably) producing an outflow of £1M.By the end of year it is possible that the company will be debt free on these figures.Or is that rose tinted glasses??

[brumont] 24/3/2009 07:53

This, and another set of positive results, could really move this up big time.
IMHO

[jwe] 24/3/2009 07:44

Yes but in this market to obtain just over 2/3rds of what they paid for it a few years ago does not seem bad.It also looks like Rocom was strongly cash flow negative(£2M outflow last year)so the balance sheet should now improve much more rapidly which has always been the problem here.

[masurenguy] 24/3/2009 07:43

Well that's history now - the impact going forward is what really counts. Rocom contributed almost half the sales but just over 30% of the operating profit and it was also a drain on cashflow. The deal should reduce the debt by 50% to circa £11m straight away and see it into single digits by the summer.

Alex Tupman still holds 13m shares, or nearly 17% of the company, so he still maintains a significant stake going forward. Question is will they become a target for a predator now that they are leaner, more profitable and cashflow positive going forward !

[stemis] 24/3/2009 07:30

Bought for £17.6m sold for £12.45m. An exit price of 3.6 x ebitda. Comparable valuation of total ATCG was about 4 x ebitda, so dilutive. Looks a poor deal. No wonder Tupman is standing down. What will happen to his shares though?

[masurenguy] 24/3/2009 07:20

RNS Number : 3499P
AT Communications Group Plc
24 March 2009

The Board of ATC is pleased to announce the disposal of Rocom Limited ("Rocom"), the Group's distribution subsidiary, for a total consideration of £12.45
million to Nimans Holdings Limited, one of the UK's leading telecommunications
and data distributors. The Group was advised by Houlihan Lokey on the
transaction. The £12.45 million consideration will be satisfied via GBP11.95 million in cash on completion, with a further non-contingent cash sum of GBP0.5 million
payable on 23rd March 2010. The non-contingent deferred consideration is secured behind Niman's bank facilities.

For the year ended 31st December 2008, Rocom generated GBP45.4 million of Group revenues and GBP3.5 million of Group EBITDA. Rocom generated a cash outflow before tax of approximately GBP2 million during the same period. The sale of Rocom enables the Group to improve its strategic focus around its twocore divisions, Servassure and ATC Solutions, and reduces the dependence on lower margin distribution revenues. Servassure is focussed on continuing to provide successful and growing support services to large telecommunications companies, including BT, KCom, Siemens and Verizon, whilst ATC Solutions continues to deliver comprehensive communications management solutions to SME and corporate business throughout the UK. The Board remains committed to maximising shareholder value and continues to review the Group's operations and strategy to ensure that this is achieved.

As a result of this successful disposal and the step change in the composition of the Group, Alex Tupman today announces his intention to step down as CEO of the Group. Alex founded the company in 1999 and has overseen its transformation and growth over the last ten years and considers this to be the right time to hand over to a new team which is committed to further the growth and success that has been achieved to-date. Scott Kean, currently COO and responsible for the success of the Group's Servassure division, will hold the position of CEO in the near term whilst the board undertakes a search program to ensure that the best candidate is appointed as a permanent successor.

Alex Tupman, CEO commented:- "I am delighted that we have successfully completed the sale of Rocom. We wish our former Rocom colleagues every success and thank them for their contribution to the Group. The GBP12.45 million consideration significantly reduces the Group's net debt and enables the Group to become a more focused, high margin business, underpinned by strong recurring revenue streams. This follows on from our recent trading update, which announced a three year contract win with BT worth several million pounds and a pipeline of new business for our Servassure Division, which is significantly stronger than this time last year and demonstrates the strength of the Group's brand and quality of service. I am very proud of what has been achieved over the last ten years and wish to thank everyone at ATC for their hard work and dedication over the years. I leave the Group with a strengthened balance sheet and a refocused business primed for continued growth under an established management team and a fabulous workforce. As a result, the Board is confident of the Group's long term prospects."

[qs9] 24/3/2009 07:14

There you go: significant reduction in net debt. Hopefully now seen as a big +ve. Lets see how market rates the share price on the open

[brumont] 23/3/2009 10:31

The notice of results had been announced by this time last year.
I wonder if they are delaying to get the disposal as a post balance sheet event. I assume, if it happens, it is going to herald a significant reduction in net debt.

[staymour] 20/3/2009 13:43

Our seller seems to have been discouraged temporarily by the drop in price.

No doubt waiting in the wings for a chance to dump some more.

[pjdeery] 18/3/2009 19:56

I also concur with message 1420,but did notice that most if not all the deals on Monday and Tuesday did appear to be sells going by the trade price.

[dave108] 18/3/2009 19:50

Agree with jwe

[jwe] 18/3/2009 14:39

If debts and financing are under control this is a bargin.The price is where it is because the market is unsure

[staymour] 18/3/2009 11:11

Yes could be someone with insider knowledge offloading.

But hopefully even without Rocom disposal there will be re-assuring news in the accounts, that shows ATCG finally has got a handle on this business's finances.

[jwe] 18/3/2009 08:25

Deal off perhaps?

[staymour] 18/3/2009 08:20

Well finally seems to have cracked now.

Sellers locked in for a while again, unless they panic sell and drive the price down further

[jwe] 17/3/2009 16:37

But given the selling the share price has held up better than i would have expected

[staymour] 17/3/2009 15:07

fianlly share price succumbing to a bit of determined dumping.


Could do with some of these promised announcements soon.

[staymour] 03/3/2009 17:38

Well I hope this isn't the kiss of death.......... but it seems to be holding up remarkably well in these skittish markets.

Perhaps at last some value gonna return to our shareholdings?

Wonder how the ROCOM possible disposal is going, maybe I should give Alex a quick bell and find out.

Or maybe not .......

[staymour] 27/2/2009 09:30

Yep, let's hope the company can find its way back from the financial wilderness that it's been cast out into.

And give us a few bob profit as well :-)

[davidosh] 26/2/2009 15:10

Most certainly something behind it as this company was almost the worst performer in its sector on AIM and unloved in 2008 now the new year and steady increases....up nearly 50%

[rivaldo] 26/2/2009 13:52

Yep - ticking up again today. This strength does make you wonder whether there's something happening in the background.