Adept Technology Share Discussion Threads

[ponderer] 24/11/2006 14:07

YOU TALK ABOUT HIM EATING CURRY. THAT IS LIKE MEETING SOMEONE FROM RWANDA AND THROWING THEM SOME GRAIN, WHEN THIS AFRICAN'S VIEWS DIFFER FROM YOUR OWN. LEARN TO BE TOLERENT OF OTHERS. JUST BECAUSE HE IS DIFFERNT DOESN'T MEAN HE DOESN'T HAVE THE RIGHT TO BREATH THE SAME AIR

[olmert2] 24/11/2006 11:37

nilip - This jotoha1 has been eating toomuch curry and posts nonsense whereever he goes.

He was deramping EEL to 40 pence and is now at 90pence.

Surprisingly has not posted since.

[jotoha1] 24/11/2006 11:36

Needs to drop substantially before there is any value here, clearly they are under the cosh for the time being!!!!!!!

[jazza] 24/11/2006 11:30

If they maintain turnover/EBITA margin over the full-year, EBITA will come in at £2.5m. That compares to a market cap of £15m.

6 * EBITA is a low rating.....that's probably what nilip is buying into.

[shiny1000] 24/11/2006 11:04

nilip,

f/y below expectations, then what were the expectations and why even after 97% t/o increase are f/y less than expected?

[geezermatic] 24/11/2006 10:47

The competition is also struggling to cope with the free broadband coverage - watch customers leave when the extras sink in and the service is lousy.

nilip - whats your average?

[nilip] 24/11/2006 10:25

Big faller - down almost half just this week !

F/Y may not be met as initially envisaged - but the fall looks seriosuly over done now.

I've gone long - could be a significant bounce ?

The impressive Interim figures (due soonish) will also produce a bounce.

[ashleighp] 21/9/2006 12:08

I disagree - the IDN rumour has been around for a long time and my personal opinion is that it is rubbish. IDN would be too expensive, too much hassle (they are a public company) and do not fit in with Adept's stated acquisition strategy.

This is very much a "believe it when I see it" rumour.

[westendwire] 20/9/2006 15:04

This should move upwards over the next few weeks because a well informed source of mine has advised that they are about to buy an outfit called IDN Telecom

[blank frank] 15/9/2006 19:41

Please note the following new thread which may be of interest:
"Telecom Shares You Should Buy: The Tips League Table"

[jazza] 06/7/2006 17:28

Estimates for next year are £22m turnover and adjusted EPS of 14p (P/E 12.5).


I think these will be smashed because:

- March 2006 turnover was £1.62m or just under £20m annualised.
- Fizz acquisition to add £3m for the year.
- Organic growth (guess at £1m).
- Acquisitions (guess at £4m).

So I'd guess turnover of £20m + £3m + 1m + 4m = £28m and adjusted EPS of 18p, a forward P/E of under 10 for a sector-leading, fast-growing company.

It's just far too low IMHO.....just hope word gets around and the herd arrive.

J.

[olivercromwell] 07/6/2006 13:17

just heard on the grapevine that ADT are on the verge of announcing another acquisition, unsure who it maybe so lets wait and see

oc

[jazza] 06/6/2006 12:54

Maximoney,

Tend to agree.....when comparing ADTs previous acquisitions to IDN I see:

a) They are smaller.
b) They are not listed.
c) They are more marginally profitable.

a) IDN may lead to indigestion....too big a mouthful to integrate easily.

b) IDNs shareholder may hold out for top dollar - maybe too much for ADT.
c) IDNs EBITDA margin for this year will be around 10%, less than ADTs 20% target but more than ADTs other acquisitions.


In summary, if ADT acquired IDN they would acheive scale more quickly.....but the potential to added value would be less than ADTs norm.....and their would be risks associated with doubling in size in one go.

I do think it would be in absolute terms a positive for both IDN and ADT shareholders if they do....but I think ADT can do better and so, relative to carrying on with their current strategy, acquiring IDN is a no-no.

All IMHO,

Justin.

[maximoney1] 05/6/2006 19:11

Adept, have left it too late to buy IDN imo. The increase in turnover and eps brought about by FSB telecom, would make it unpalatable for them....i would be looking at 3p in cash plus 2p in adept shares minimum and there are a lot of private IDN investors that have realised the potential, a tad longer than shares mag....imo.

It would be an extremely good fit for ADEPT, just a tad rich, but at least if they tried then IDN shareholders might see what the 'real' value of IDN is approaching.

[canny man] 02/6/2006 13:06

IDN Telecom next on the list according to Shares Mag

[jazza] 01/6/2006 07:11

An acquisition of (approx) £3.84m of annual turnover for up to £3.2m. Probably about £3m turnover for what's left of the current financial year.


Current profit margin of 4.8% gives about £185K profit so the seller will be happy.....if ADT can get 20% EBITDA out of it - 768K - they'll be happy with the exit multiple of just over 4 times.

Good business all round.

J.

[olivercromwell] 01/5/2006 08:33

Ian Fishwick, the Finance Director, is the brother of Chris Fishwick the Splits cap guy from Aberdeen Asset Mgt..I've known both of them for quite a while, and both of them are very astute businessman. They're both close friends of my eldest brother so my relationship with them is distant but from what I know these guys know how to make money and are very agressive..

I doubt i'll be in receipt of any confidential or price sensitive info and of course if I was i wouldn't dream of posting it on here but it looks like a tidy outfit..

OC

[doomsday investments] 28/4/2006 18:47

Sales rocket at hungry hyper-efficient acquisition machine
AdEPT Telecom (ADT) is a business opportunity born out of the remarkable changes that have taken place in the telecommunications market since BT's monopoly grip was lifted. Over the last five or six years, hundreds of small resellers have been able to target local markets helped by access to spare line capacity, regulatory rules forcing BT to give them access and BT's comparative disinterest in the bottom end of the business market.

Business Summary
AdEPT Telecom is a non-network based telecommunications company. AdEPT provides fixed line calls, line rental and broadband to business and residential customers in the United Kingdom.

The result is hundreds of local resellers with businesses doing turnover in the £1m to £5m range but without the scale or management to grow or become seriously profitable. They can make a living for their owners but that is about it.

At which point enter AdEPT Telecom. The company was formed and financed some three years ago by two telecoms executives with big company and acquisition experience and a managing director from investment bank, JP Morgan. The mission was to act as a consolidator at the bottom end of the business telecoms market offering an exit route to the owners of these smaller businesses.

As indicated in my table of sales and profits the strategy has proved an immediate success. Since the business was formed the group has done 12 deals with turnover growing from nothing to an expected £1.4m in March, which equates to an annualised rate of nearly £17m a year. This is an annualised rate so last year's turnover, due to be reported in early June, will be less, say £12m for the year with £17m plus in prospect for the year to 31 March 2007.

Turning two per cent profit margins into 20 per cent
Even better than the sales growth is the impact on profits. AdEPT has been constructed to be highly efficient. Like the companies it acquires it buys spare network capacity, albeit using its greater size to buy on finer terms. It has excellent software, fully automated processes and a highly scalable model. Chairman, Roger Wilson, claims that AdEPT operates with three to four times the turnover per employee achieved by the smaller businesses it is buying. As a result it is able to buy companies with profits running at two per cent of sales and rapidly integrate them to achieve a return on sales of 20 per cent.

This enables it to pay a good price for vendors of businesses while buying on attractive terms for AdEPT shareholders. A good example was the recently acquired Transglobal. The cost of buying, partly deferred, is likely to be between £3.1m and £3.2m for a business with turnover running at around £5m. The integration process is swift since AdEPT typically buys the business but takes on almost none of the costs. In the case of Transglobal it took on three key employees. The result is that, within weeks of purchase, Transglobal is part of AdEPT's billing system and generating 20 per cent profit margins or around £1m a year.

Not all the deals are perfect. In the early days AdEPT was caught out buying a business that rapidly lost customers because of churn. As a result deals have been structured to defer payment based on customer numbers achieved. This ensures that the group only pays for business actually received.

Efficiency is the key to profits
Great efficiency is required to make money from the small and medium sized companies that form AdEPT's customers. A typical customer might be billing £160 a month generating a gross margin for AdEPT of around £55-£60 a month. Not surprisingly giant telecoms service providers like BT and Cable & Wireless are not interested in such customers. Indeed Cable & Wireless is looking at selling its small customer contracts with AdEPT a likely buyer.

The flotation has strengthened AdEPT's hand for acquisitions in the future. It raised £8.2m of which some £3m was used to buy Transglobal with a further £2m earmarked to repay debts. It has a £6m line of finance with Barclays that will grow in line with EBITDA (cash generated by the business). As a result of this strong position the company has already announced its first post-flotation deal, the acquisition of Admiral, and Roger Wilson expects to do deals at a rate of one every two months. He says he has the names of some 50 companies that have expressed an interest in selling.

The shares are still substantially owned by management and are a tight market. However with sales and profits on a strong growth path they look well worth buying.

[jazza] 20/4/2006 22:42

Looks like a full valuation - £42m for a company with annualised turnover
about (my guess) £16m and EBITDA of £3m.


However, they do look a class act:

- Revenues per employee more than 4 times the industry average
- EBITDA margins of around 20%
- Integrate acquisitions in less than 6 weeks

Am tempted to buy, although I may well wait until results for the year to 31st March 2006 come out......would expect another acquisition in the next few weeks if they are really going for it growth wise......and maybe yet another one before results day.

Very interesting IMHO.....

Justin.

[nockybalboa] 08/4/2006 11:59

looks like the blokes over at www.fairshare.biz got it right again as usual, how do they do it

[canny man] 29/3/2006 16:25

Heard they might be goung for IDN Telecom next. Further info appreciated.