Patientline Share Discussion Threads

[blott] 08/8/2007 16:52

Scribbler - good luck to you - what did you pay for your last major purchase?

[scribbler101] 08/8/2007 16:02

Zooming up - mainly on +

[scribbler101] 07/8/2007 17:39

Scribbler101 - 23 Jul'07 - 16:37 - 1467 of 1484 edit


As regulars will know I think this company is ill conceived and fundamentally bankrupt.


OTOH it's got over 40p/share turnover and can hardly avoid making an operating profit. So I think it will restructure rather than die, and that there should be more than 1p/share left for present equity holders.


So I am now the proud owner of more PTL shares than I have ever before held in a single company.

[blott] 07/8/2007 11:30

Scribbler - have you recently bought shares in PTL? If so could you tell me your rationale - I'm intrigued and interested.

[scribbler101] 07/8/2007 11:12

Looks like my suggestion that higher price might not maximise revenue may have been sound? Even now I am a major shareholder I still find it hard to feel for this company!


Patientline cuts hospital call charges UPDATE (Updating with confirmation from the company)
LONDON (Thomson Financial) - Patientline, the troubled UK hospital
communications provider, said it has cut the price it charges for making calls
from hospital beds.
The Slough, Berkshire-based company said it will reduce the cost of calling
out to 10 pence per minute and cut the minimum call charge from 40p to 10p.
Patientline had upped the tariff for calls from hospital beds to 26p from
10p in April. The price cuts come into effect tomorrow.
Customers wishing to ring in to bedside phones will still have to pay up to
49 pence a minute.
"The price cut is testament to our dedication to making people's stay in
hospital easier, by offering customers some of the entertainment and
communication choices they would enjoy at home," Charlotte Brown, commercial
director of Patientline said in a statement.

[marben100] 02/8/2007 08:41

To get an idea of what is likely to happen to Patientline and its shareholders, it is instructive to have a look at Biofuels, which has delisted today. Shareholders ended up with 6% of an unlisted private company (the banks owning 94%). See

There seems to be a direct analogue here, as both businesses can generate trading cashflow but are unable to repay their debts + interest.

Regards,

Mark

[scribbler101] 26/7/2007 16:26

Bit quiet today!

[scribbler101] 25/7/2007 17:05

m100 - indeed be wary of any business with only one product and one customer.

Shore Capital et al HAVE to find thingsd to invest in. Though I can't see how the business model for this ever made sense.

[marben100] 24/7/2007 15:14

AIUI the onsite staff were originally there to deal with breakdowns, problems etc. With a typical installation having > 100 units, there is a constant stream of issues. We also have the vending machines to be emptied etc etc.

I actually had some correspondence with Geoff White about this, having visited an elderly relative in hospital. Without me showing him how to use the unit, he would not have been able to do so. I therefore suggested that PTL's onsite staff should perform a similar function - but clearly in a "non-pushy" manner.

Whilst they seem to be trying to do this, I understand that staff are incentivised to make more sales (I think this was stated in the AR IIRC) and the press has reported that they've been doing a "hard sell" job on patients. If true, this is highly undesirable.

I don't know what the cleaning procedures are. Why not e-mail PTL via this form: & ask? Obviously as I'm no longer a shareholder I am not researching actively any more - but I keep an eye on what's happening and, as I've said, I'll be interested to see what the final denoument is - and will be surprised/particularly interested if it's anything other than the business ending up in the hands of the banks.

I've learnt a lot from investing in PTL so far, primarily:

1. Be wary of companies reliant on government business/contracts!
2. Don't assume that because an investment bank (Shore Capital in this case) invests heavily a) they know what they're doing; b) that it will be in private shareholders' interests.

[scribbler101] 24/7/2007 14:28

At the current price 100k 1.01/1.75 60k I am tempted to become a MM myself! but might get nibbled at.

[scribbler101] 24/7/2007 14:24

Thanks Marben. Interesting. You have obviously done some research into the co. Do you understand why they have onsite staff? Seems to me too expensive just to be marketing, but surely the kit needs no active operation?

And do you understand how it is cleaned? I can't understand how that cannot be part of hospital operations, as SURELY it must be cleaned between patients?

Or is there a huge potential liability when it is proves to be an MRSA/CDiff vector?

[jockblue] 24/7/2007 14:17

I too would be amazed if there wasn't a termination clause on administration/receivership. The NHS trusts need to know that they are dealing with a long term reputable company who can supply service to them on an ongoing basis. It's probable that administrators would negotiate to keep the contract alive whilst they attempted to find buyers (as without them, there's no value), but unlikely to rest purely on service delivery ability imho. And no, I've not seen the contracts either:-)

As to the NHS allowing anyone in to run them....I'd shudder to think of the terminals being sold to QVC or an ad company or The Fantasy Channel or someone like that.....

[marben100] 24/7/2007 13:19

Scribbler,

I am an ex-holder. Sold out last August, when I concluded that the business had no future as its technology was obsolete, after attending the AGM and discussing the kit with their CTO.

Are you familiar with the contract terms? Does no cash pass in either direction?

I have not had sight of the contracts which are, of course, confidential. However, when I attended the AGM in 2003, I got the following response to a question that I posed about the contracts:

Q
What is average hospital contract term?

A
New ones are 15yrs + 5 year automatic renewal. Some older ones are 10-12 years. After the meeting, their founder also said to me that they maintained a firm principle that if hospitals didn't contribute to system costs (which is the case), they didn't get any fee either. So PTL incur all the costs but also make all the profits.

Hope this answers your question. Full report is here:

[richardbees] 24/7/2007 13:10

...just his breath

:-)

[scribbler101] 24/7/2007 13:08

M100 - It is common for contracts to fail or be cancellable if a party goes into admin/rec'ship. Are you familiar with the contract terms? Does no cash pass in either direction?

Do you hold?

[marben100] 24/7/2007 13:01

And receivership/administration likely to trigger default clauses in agreements with NHS.

Not so sure about that. As long as PTL is able to fulfil its obligations under the contracts, the NHS may well not have grounds to terminate. As long as they don't, then that's the banks' lever against the NHS. From the NHS/Trusts' POV, why should they care who operates the kit, as long as it continues to operate and doesn't cost them anything?

Liquidation seems unlikely to me. That would serve no-one's interests.

One thing's for sure: the banks will want as much of their money back as they can get. Whatever happens, it will be instructive to see how they achieve this goal. We'll find out soon enough.

[scribbler101] 23/7/2007 17:29

Banks have great power against PTL, but very little against NHS. And receivership/administration likely to trigger default clauses in agreements with NHS. If it goes down the receiver might simply abandon the kit rather than pay to remove it.

I too hope I am right! It's not like Corus at 4p with lots of net worth. But OTOH it has no significant operating cost base and a very tied market.

[marben100] 23/7/2007 17:09

So I expect a d/e and a rights issue.

A d/e is conceivable (with the banks ending up with the vast majority of the e). But who on earth would put money into a rights issue? What could anyone expect to get back from such an investment? I can't see the banks relinquishing their "priority creditor" status and allowing anyone else to get any dividends.

Banks' powers tend to be pretty draconian when covenants are breached - I doubt much legal fighting is necessary.

I expect we'll find out exactly what will happen within a few months. I genuinely hope, for your sake, you're right Scribbler, and wish you good luck.

What I hope we can agree on is that the NHS won't end up owning the kit. I can't see them paying anything meaningful for it and the banks certainly wouldn't let them have it unless they did get a significant payment.

Regards,

Mark

[scribbler101] 23/7/2007 16:58

Mark

No question that the banks COULD pull the plug. I just don't think it's in their interest to do so. If PTL goes into receivership/administration it will generate lots of expensive hassle. And it remains better for the banks for operations to proceed unhindered.

So I expect a d/e and a rights issue. The only question is how big a carrot to the existing shareholders for their cooperation?

[marben100] 23/7/2007 16:52

Scribbler et al,

NHS will never own the kit. The banks will. They will just use any cashflow generated (and it does generate positive cashflow) to recoup what they can of the debt owed.

They will much prefer to own the kit & have the service run cheaply than to sell the kit for next to nothing.

I personally doubt shareholders will get anything, though others disagree. AFAICS the banks have PTL by the you-know-whats.

Cheers,

Mark

[scribbler101] 23/7/2007 16:37

As regulars will know I think this company is ill conceived and fundamentally bankrupt.


OTOH it's got over 40p/share turnover and can hardly avoid making an operating profit. So I think it will restructure rather than die, and that there should be more than 1p/share left for present equity holders.


So I am now the proud owner of more PTL shares than I have ever before held in a single company.

[jockblue] 23/7/2007 10:22

boelhoub

If the NHS staff do have enough time to show people how to work the PTL machine, the taxpayer pays.

If they don't then the company goes bust, the capex is sold off to whoever wants it (and lets face it, bedside monitors like that are not really of any use to anyone other than a hospital), so the NHS or a newco funded privately would probably be the only bulk purchasers of these things, and could afford to offer pretty much nothing for them and have it accepted. Who loses in this case - the banks, the other creditors and the shareholders.

[boelhoub] 22/7/2007 18:52

Scrib, if NHS staff do not have enough time to properly feed and wash patients I do not think that they will make time to instruct people on the PTL unit...
In the end the tax payer will pay...

[richardbees] 21/7/2007 21:44

With all the fuss about hospital acquired disease I certainly wouldn't want to put the mouthpiece of a mucky handset anywhere near my face!

[loverat] 21/7/2007 20:30

What a shame. Yet another company ready for the knackers yard.