AT Communications Share Discussion Threads

[stevemarkus] 22/5/2009 10:34

He's not likely to want to sell his holding at this level though, is he. These look very cheap to me given that we expect to see debt reduced to around £4M in a couple of years - I've bought a few at 10.5p and hope to see them do well over the next year or so.

Cheers,
Steve.

[jwe] 22/5/2009 10:20

Hi Mas-As you know i sold out here but it is still on my watchlist.I think the fact that the CEO position has been sorted is certainly good.The problem with the announcement,as i see it, is the comments over Tupman`s holdings.It implies that he wants to offload his holdings which could supress the share price for a long while.This could be evidenced by buys going through under mid today which was a problem here for a long while.

[masurenguy] 22/5/2009 07:24

Seems like a good move to me !
..............................

RNS Number : 6908S
AT Communications Group Plc
21 May 2009

Scott Kean appointed as CEO

The Board of AT Communications is pleased to announce that, Scott Kean who has
been acting Chief Executive since 24th March 2009, has now been appointed as
Chief Executive with immediate effect. At the same time, Alex Tupman, who announced his intention to step down as Chief Executive and leave the business on 24th March 2009 following the disposal of Rocom, has now formally stepped down from the Board. Alex has agreed to an orderly market in his shareholding and we are pleased that he remains available to provide assistance to the company as required by the Board.

John Standen, ATC's Chairman commented:- "I am delighted to announce the appointment of Scott as ATC's new CEO. He brings a wealth of industry experience to the role and has been instrumental to Servassure's success over recent years with this division playing a key role in future growth. Also I would like to take this opportunity to thank Alex for his significant contribution to the business, which he founded and we are grateful for his ongoing support as he also pursues other business opportunities."

[pjdeery] 18/5/2009 01:57

davidosh,
AGM at 11.00am Thursday 28th May at offices of DLA Piper UK LLP,3 Noble Street, London EC2V 7EE.

[davidosh] 17/5/2009 22:08

I think the AGM is on 28th May but not sure if I will be able to attend. Where is it this year ? I could not find the details on the website.

[qs9] 17/5/2009 20:53

So looks like 1/2 year results or earlier IMS may provide the catalyst assuming they are delivering!

[masurenguy] 17/5/2009 20:34

The most recent Cenkos Note for those who have mot seen it.
...........................................................

15 April 2009
AT Communications
Price Target 34p
52-week range 9.75p - 35p

AT Communications (ATC) announced preliminary results for the year to December
2009 today. The figures are over-shadowed by the recent disposal of Rocom
(announced in March 2009), which has strengthened the group s balance sheet and
prospects. That said, the numbers were in line with our expectations - EBITDA was up 4% at £8.7m on sales of £98.4m (£88.4m). This organic revenue growth of 11% was driven by a particularly strong performance from Servassure which delivered a 58% increase in sales on the back of c£2m of investment in H1 2008. PBT was down 4% at £6.0m, due to higher interest expenses in 2008, but net debt of £18.1m was well down on the interim level (£22m). The sale of Rocom for £12.45m has improved the groups financial strength further, but net proceeds were only c£8m after the payment of fees, and a working capital investment in the two months before sale.

The Rocom disposal has improved ATC s financial position and the continuing
operations, which generated sales growth of 22% in 2008, are well positioned to
deliver further growth in profitability and cash flow in 2009 and beyond.
However, the rating (EV/EBITDA of 3.9 and PE of 3.3 to December 2009) is
unlikely to improve until the group can give clear evidence of cash generation.

Forecasts
We are forecasting revenue and EBITDA for 2009 of £54.4m & £5.1m respectively.
These figures exclude the two months of contribution from Rocom in 2009, which we estimate to amount to revenue of £7m and EBITDA of £0.4m, and assume that sales increase by only 3% in 2009. Given organic sales growth in 2008 of 22% and a number of encouraging contract wins in recent months, we consider this assumption to be conservative.

Cash Flow and Balance Sheet
ATC has had to invest a significant amount of capital to fund the growth of the last two years. In 2008, there was a £7.6m working capital outflow, primarily to finance the 58% sales growth at Servassure and additional product lines at Rocom (c1.6m). We are forecasting net debt to fall to c£9m by the end of 2009 given the proceeds of the Rocom disposal and the reduction in working capital investment required as growth slows.

Graeme Kemp
Research Analyst
[phone]
[e-mail]
Stuart Lunn
Research Analyst
[phone]
[e-mail]
Share Price Performance

Significant Share Holders
Timothy Alexander Tupman 16.8%
Rathbone Investment Mgt 9.2%
New Star Asset Mgt 4.1%
Scott Charles Kean 3.4%
Ian Crawley 3.1%
Other Directors/Officers 0.2%
Cenkos Securities plc is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange.

[masurenguy] 13/5/2009 23:02

I wondered what had caused the fall in the price and now I know ! :0)

[tyranosaurus] 13/5/2009 19:21

I`ve put the kiss of death on these by buying at 12.9p just days ago.

Down ever since.

[this_is_me] 08/5/2009 22:58

thmk - you are not thinking.

The loss was a paper loss due to preparing the accounts for the Rocom disposal in order to take advantage of write downs for tax reasons.

Net debt increased due to increased working capital and investment in Servassure (which as a result increased turnover of 58%. in Servassure)

Read the following extracts from the accounts and use what little brain you have.

The consolidated loss before tax for the year was (GBP1.134m) (2007: profit of
GBP2.8m), due to the impairment and amortisation charge of goodwill and
intangible assets in Rocom of GBP5.898k (2007: GBP757k), being recognised in the
year prior to its disposal in March 2009.

Earnings per share


Adjusted diluted EPS decreased to 7.5p (2007 7.9p) due to higher interest
charges. Basic and diluted earnings / (loss) per share for the year were (0.8p)
compared with 3.5p in 2007.

Cash flow and Debt


The Group's net debt increased by GBP3.1m during the year to GBP18.1m (2007:
(GBP15.0m). This was principally due to increased working capital in Rocom and
investments made in the Servassure division during first half of the year.


Since the year end the Group has completed on the sale of Rocom Ltd for a total
consideration of GBP12.45m gross of fees, tax payments and expenses. GBP0.5m of the consideration is deferred to until March 2010.

[thmk] 08/5/2009 20:55

Just to "keep things real"-the accounts show a swing from a profit of 3.5p per share to a loss of 0.8p, with the borrowings (despite previous promises) increasing and the cashflow is negative.

[puffintickler] 05/5/2009 10:33

Guilty as charged; ATCG seems one that has been left behind by the recent rise in the small caps.

[masurenguy] 05/5/2009 10:16

Some buying interest this morning !

[penpont] 20/4/2009 23:36

Following from IC today, wiht buy rec and new forecasts from housebroker:

In March 2009, AT Communications (AT) announced that it was disposing of its telecoms products box-shifting business Rocom to Nimans for £12.45m, of which £500,000 is deferred for 12 months. Now AT is a "smaller business but is more stable". And that's not only because Rocom's profit margins are under attack, but also because the cash cuts debt by £7.5m - almost the same as what was spent on extra working capital last year. Broker Cenkos believes that end-2009 net debt will be almost £10m lower at £8.8m and just £4m a year later.

Advertising


New look AT supplies telephone and data systems to UK companies. But the important development last year was the establishment of a professional services arm to support telecoms giants such as BT and Colt. Half the £7.60m rise in Servassure's 2008 sales to £19.44m came from this nascent business, addressing neglected areas of support such as project, inventory and audit services, as well as call-centre management. Without Rocom, Cenkos forecasts 2009 sales of £54.4m and adjusted profits of £3.8m. A 14 per cent tax charge produces earnings of 4.5p and a prospective PE of three.

[jwe] 15/4/2009 13:09

For me it is a hold until progress has been made on debt

[jasper28] 15/4/2009 12:17

What are your thought on making a purchase in this share, i need to lower my average but dont want to get bitten twice. I like many have been in from the start and bought at 37p so could do with clawing back some of my losses.

[jwe] 15/4/2009 11:23

Yes i too noticed the outlook statement.There are not many companies issuing outlooks that positive.Of course they have to convert that into profits but i`m prepared to give them the time to do it

[rivaldo] 15/4/2009 09:25

At £6m PBT and 7.5p adjusted EPS the results were bang on forecasts (Edison's anyway).

Collins Stewart seem to go for around 5p EPS for 2009 post-Rocom disposal.

I agree scburbs questions about cash flow, in particular what has happened between the year end and today's results, which is not mentioned.

Nevertheless, instinctively I'd have to say ATCG looks cheap now on a P/E of around 2.8 or so for this year and only around £6m of debt. Adding the debt to the £10.6m m/cap gives around £16.6m, against £5.1m EBITDA as forecast. Pretty good, especially given the very high recurring income.

And the outlook seems extremely confident:

"We have achieved a great deal during 2008, investing in the continuing areas of our business and working on the disposal of Rocom, which we believe has transformed the outlook for the Group. We have a refocused business, a strengthened balance sheet and a pipeline of new business, which will further enable the Group to grow in 2009 and beyond. This has already been demonstrated by the success we have had with contract wins so far this year. We are confident about our future prospects."

[masurenguy] 15/4/2009 09:14

I agree - elimination of the dividend is the first clear indication that they are serious in addressing the residual debt even after the £12m inflow from Rocom. If this had been maintained at 1p it would have cost circa £750,000.

Another key factor moving forward will be increasing the higher margin sales derived from Solutions and Servassure. Most of the business in the latter division reflects ongoing service and maintenance business which should continue to prosper even in a more difficult economic climate. I'm not sure if the recent PCT contract wins come under the OGC umbrella but clearly this is a sector that they should be able to focus upon through Servassure.

Another important factor here will also be leadership and entreprenurial flair in taking the business forward. I don't know whether Scott Kean is a serious candidate for the CEO role (he certainly has plenty of sector experience) but he now has an opportunity now to stake his claim by what he can aschieve over the next few months.

[jwe] 15/4/2009 08:56

Cutting the divi will also make a positive impact this year compared to last

[scburbs] 15/4/2009 08:34

If I read the cashflow statement correctly a cash inflow of £860k before tax and interest would have been £2.86m without Rocom (based on statements that Rocom used £2m in 2008).

This compares to continuing operating profit of £4.8m, so a vast improvement, but still a couple of million of working capital investment. If this is the ongoing position then debt should be paid down quickly, but tax and interest will leave free cash flow at £1.5-2m. If they then have £1m of capex etc. then free cash flow is more like £1m and debt paydown will be a lot slower.

If they could get operating cashflow up closer to £4.8m then that would make a massive difference.

[scburbs] 15/4/2009 08:25

Solid results, but plenty of questions.

1. Has Rocom disposal completed? [Edit: It is stated that this has completed]
2. What was net debt on the completion date? (i.e. has Rocom used more cash between 31 December and disposal)?
3. What is the cashflow profile of remaining group, particularly the fast growing Servassure?
4. What are the bank facilities post disposal?
5. Why are chairman and CEO resigning in the same year?

etc.

[jwe] 15/4/2009 08:17

Looks like more promise and more `wait and see`,which unfortunately has been the case for the last couple of years.Nothing there to make me want to sell but not tempted to buy either.IF(a big word) they can manage debt(which has always been a problem with this company)the share price should do well.The trouble is the jury is definately out imo.