Teliti Share Discussion Threads

[blank frank] 24/3/2007 16:36

I particularly like these parts of the letter:-

"Against this background the company, under the direction of the CEO Jeff Williams, has undertaken a major cost cutting exercise. He has been ably assisted by the new Finance Controller, Mark Godfrey, who was appointed in February 2007. This action is succeeding and the Board believes that it will enable the core business to restore the underlying value to shareholders."

" ... I am optimistic that the company can achieve a successful outcome to what has been a very difficult period."

Perhaps the company should rename itself from TMG Telecom to TMP Telecom -
Telephone Maintenance Phoenix!

[blank frank] 24/3/2007 16:30

I received the letter from TMG today too. Here it is in full:-

22nd March 2007

Dear Shareholder,

As some of the shareholders will be aware from coverage in the press the company has experienced a difficult time. Although the financial information presented to the Board as recently as December 2006 indicated that the accounts to 31st July 2006 would show a small profit, it became apparent in January that the company had made substantial losses. The majority of these losses arose from large non-cash write-offs of stock and goodwill and further losses generated by an impairment review under the new European accounting standards. The board, on the advice of its Nomad, decided to seek a suspension of the company's shares to avoid a false market developing. Investigations are taking place to ascertain the reasons why the information was incorrect and when these have been concluded shareholders will be advised of the findings.

Following the disclosure of these matters in January, three board members resigned - Mr McLaughlin, Mr Lewis and Mr Smyth. Mr J S Williams CEO and I are left as the only Directors of the Board.

Against this background the company, under the direction of the CEO Jeff Williams, has undertaken a major cost cutting exercise. He has been ably assisted by the new Finance Controller, Mark Godfrey, who was appointed in February 2007. This action is succeeding and the Board believes that it will enable the core business to restore the underlying value to shareholders.

Because the losses were identified so recently, the company has not yet completed its statutory accounts and cannot yet present them at an annual general meeting (AGM). In these circumstances and in order to comply with legal requirements, the Board has been advised that the proper course of action is to convene and adjourn the AGM until the accounts are completed and can be presented. The accounts are expected to be completed shortly following which a new date will be set for the meeting.

To this end we hereby enclose a notice convening an AGM (and the relevant proxy form) at which the only resolutions are to approve the adjournment of the AGM and to keep in place all existing authorities until the AGM is reconvened.

I regret it has been necessary to take this course of action but I am optimistic that the company can achieve a successful outcome to what has been a very difficult period.

Tim Razzall
Chairman

[kimboy2] 24/3/2007 12:22

The stocks and goodwill amounted to about £2.8m at the last interims ao they won't have much of either if they are writing £2.2m off.

If they are writing of the goodwill would this indicate that their acquisitions have been duff ?

Why is Greg Hallet still there ?

[jonwig] 24/3/2007 11:07

Kimboy - nor am I, but so long as no cash is entering or leaving the company, it will be 'non cash'.

I think it's the new IFRS thing, where changes in the value of stocks, investments, IP, etc. have to be shown in the Revenue account. In the past, you'd just recognise it on the balance sheet, and write it down there.

Maybe they have a stockroom full of these:

[kimboy2] 24/3/2007 10:45

I am not an accountant but what is a non cash write off of stock ?

[blindfaith2] 24/3/2007 10:11

Hi Jon

I thought it would be an EGM too, but it states

" THIS IS NOTICE THAT an Annual General Meeting of the Members of the Company will be held at 5 Deansway, Worcester on Tuesday 17 April 2007 at 11:30am for the purpose of considering, and if thought fit, passing the following resolutions:

1. THAT the Annual General Meeting convened by this notice be adjourned and reconvened for a date not later that 17 June 2007......................."


The only other resolution is to give the Directors continued powers until the second AGM.

So we seem to be having two AGM's, doesn't sound right to me but bow to their superior knowledge on this technical point.

Oh and John, I was thinking a fiver a piece, not for the whole lot !

[blindfaith2] 24/3/2007 09:42

So all is not lost then, well not quite all !

I have rec'd a Shareholder letter today ( dated 22/3 ) advising that an AGM is being called on 17 April to ask for the AGM to be reconvened no later than 17 June '07.

Tim Razall has signed the letter and it states that

" Although the financial information presented to the Board as recently as December 2006 indicated that the accounts to 31 July 2006 would show a small profit, it became apparent in January that the company had made substantial losses.

The majority of these losses arose from large non-cash write-offs of stock and goodwill and further losses generated by the impairment review under the new European accounting standards."

It goes on a bit about the AGM but finishes up with,

" I regret it has become necessary to take this course of action but I am optimistic that the company can achieve a successful outcome to what has been a very difficult period "

So £5 by Christmas ?

[blindfaith2] 20/3/2007 19:10

It's getter on for 2 months now since TEL was suspended, surely we should have heard something by now ?

What is it about this company that makes everything take so long to filter down to us poor Shareholders. If PKF are still there after this long there will be nothing left as any cash they still had will have gone on fees !

[blank frank] 20/3/2007 18:02

Nice to see NNG rising 28.57% today, up a penny at 4.5p.



As at 20-Mar-2007 17:48:33
4.500 +1.00 +28.57%

Bid Offer Volume High Low Last Close
3.75 4.75 2,697,135 4.65 3.25 4.50 on 20-Mar-2007

Last 5 trades
Time/Date Price Volume Trade value Type
16:32:41 20-Mar-2007 3.50 250,000 8,750.00 Single protected transaction
16:23:04 20-Mar-2007 4.00 50,000 2,000.00 Single protected transaction
16:22:24 20-Mar-2007 4.65 100,000 4,650.00 Ordinary Trade
16:14:29 20-Mar-2007 4.25 14,398 611.92 Ordinary Trade
15:25:36 20-Mar-2007 4.31 40,000 1,724.00 Ordinary Trade

[stemis] 18/3/2007 16:49

And so did AT Communications on the same day (with the same year end). 10 weeks to release your accounts seems a decent performance. TEL never took that sort of thing seriously and their use of a part time FD just shows how little importance they placed on financial control and management (as opposed to sales). Its was their undoing in the end. If you let sales people run riot you just get empty turnover. If you don't know what margin you are making then its hard to stand up to the sales department. I don't believe Jeff Williams was deceitful, just naive.

I am afraid there is a chance that we will never see the TEL results. I think we'll either get an administration or a takeover

[blank frank] 18/3/2007 16:31

I see that last Monday MAI (Maintel) announced their final results for the year end 31st. December 2006 ... and here we are still waiting TEL's final results for the year end 31st. July 2006. It says it all really.

12/03/07 07:02 UKREG Final Results

Maintel Holdings Plc

Preliminary results for the year ended 31 December 2006

Maintel Holdings Plc, the telecoms services company, announces preliminary
results for the year ended 31 December 2006.

Financial highlights

Turnover up 33% to #16.166m (2005: #12.197m) with underlying growth across the
group, supplemented by #1.1m London Probation Board VoIP contract announced in
February 2006

Voice and data division gross profit grown by 38% over 2005

Profit before tax and amortisation of goodwill up 16% to #2.202m (2005: #1.904m)

Earnings per share before amortisation of goodwill up 24% to 12.4p (2005:
10.0p). After amortisation, earnings per share increased by 14%, to 11.4p (2005:
10.0p)

Interim dividend of 2.1p per share paid in September; final dividend of 2.9p per
share proposed

Cash balances at year-end of #2.234m (2005: #3.625m), after acquisition of
District Group for net #877,000, share buy-backs costing #832,000 and dividend
payments of #591,000

Operational highlights

Investment in sales and account management resulting in increased equipment
sales including large scale VoIP equipment sales into existing customers
including the London Probation Board project

Enhanced network services portfolio has resulted in significant growth in the
voice and data division

Contracted maintenance revenues running at record levels, following the signing
of a number of larger new contracts, and the acquisition of District Holdings
Limited

Efficient integration of District Holdings Limited, acquired in June 2006

John Booth, Chairman, said:

"Our planned focus on top line sales has boosted turnover and contributed to
strong earnings per share growth for the year. 2006's investment in sales and
engineering capacity, combined with the District acquisition enable us to embark
with confidence on 2007 as a larger and stronger presence in our industry." ...

[blindfaith2] 09/3/2007 20:00

SteMis – I agree pretty much with your comments except I would add that most of the maintenance contrasts, would, I expect have an insolvency clause which would I expect sum up TEL, so the contract may be null and void anyway. So anyone looking to pick these up could approach each company to sing their praises and have the contracts novated across to a NewCo/ExistingCo if this was the way forward.

Whatever the scenario it is a perfect opportunity for some one to pick this up and shaft the existing shareholders so I expect to receive nothing in the future but if something comes along then great, but I'm not holding my breath.

[blank frank] 09/3/2007 19:09

In speculating about the likely outcome of this saga, we are handicapped by our lack of info. about how current trading is going at TEL. The state of current trading will clearly affect the company's ability to continue trading, and the valuation of its business.

It clearly makes sense though to try to maximise the value of all the company has, which includes its tax losses - which should be over £4 million including last year's. In addition, if shareholders get nothing, they may be more likely to press for an inquiry into possible fraud, etc.

It seems to me that the best overall outcome is for the business to be sold without an administration, albeit possibly for a low sum to reflect its debts. And for TEL's listing and tax losses to be retained as a shell.

B.F.

[jannief] 09/3/2007 09:31

I think you will find the silver Porsche belongs to Tel's CEO - Mr Williams

[stemis] 09/3/2007 07:56

Its now 7 weeks since that first shock announcement and nearly as long since PKF were appointed to investigate. Since then we have heard absolutely nothing.

For my sins I spent some years in the audit profession and I would have thought that was plenty time to get to the bottom of what is essentially a very straight forward business.

Clearly TEL is still trading and the bank has not pulled the plug. However the credibility of management is zero and TEL is not of any size to be worth appointing new management to have another go as an independent PLC. It has no institutional base or big shareholders to stump up further funding and private brokers are not going to put their clients money in again when they have already lost them so much.

Conclusion - management are negotiating a sale of TEL to someone like Maintel or AT Communications. The obvious way to do this is a pre pack. TEL goes into administration and the acquiror immediately buys the assets and trade from the administrator. The benefit to the acquiror is that it doesn't take any creditors and unrecognised liabilities. The bank gets its money as a preferred creditor (and thus releases its charge over the assets). Shareholder get nowt.

The problem is the maintenance contracts. In an administration these may effectively be dissolved, so an acquiror from administration might not be able to take them as part of the acquisition. To overcome this it may need to get the customers consent to an assignment of their contracts. Alternatively it could just buy the company without an administration. I suspect the bank is keeping the thing going until it is all resolved. The big BMWs might belong to an acquiror's management!

It will be interesting to see how it all turns out. Has anyone tried talking to the broker, Corporate Synergy?

[kimboy2] 08/3/2007 18:41

I would be surprised if the expensive cars in the car park were owned by TEL or TEL emoloyees.

[blank frank] 08/3/2007 18:37

Thanks Jonwig. That gives TEL about another four and a half months from the suspension date:
25/01/2007 10:00 UKREG Statement re. Suspension

Whether TEL issues its results may depend partly upon what from its future takes (and how long it takes). I agree that it's possible that we may never see them.

B.F.

[jonwig] 08/3/2007 18:01

Frank - I doubt they've any intention of issuing results, and their future is probably outside their control.
In fact, according to LSE AIM Rules:

"The Exchange will cancel the admission of AIM securities where these have been
suspended from trading for six months."

[blank frank] 08/3/2007 17:38

Telephone engineers are I believe paid a good salary; but I don't think they're paid THAT much ...

B.F.

P.S. Interesting to refer back to this post:-
SteMiS - 3 Nov'06 - 09:04 - 68 of 236
"Come on TEL, let's be having the results. Its over 3 months since the year end!"

Well we're now well into the EIGHTH month since the year ended, and we're STILL waiting!!
Are they trying to set some sort of record for tardiness, because this is certainly the worst I can recall from a listed company (beating the seven months I remember from an IT company many years ago).
Ok, I'm 'impressed' ... now can we please have the results!!

[whynot3] 08/3/2007 16:03

"The number of high-value cars there suggests to me that something 'special' might have been going on: either a board meeting, and/or a visit by potential buyers or investors."

Or a company living beyond its means, hence its current problems !!

[blank frank] 07/3/2007 18:19

Thanks for that Take Stock - interesting stuff.

It's clearly good that the business still seems to be continuing at an operational level, and hopefully that will continue to be the case.

The number of high-value cars there suggests to me that something 'special' might have been going on: either a board meeting, and/or a visit by potential buyers or investors.

Fingers crossed for some good news shortly ("good" being a relative term of course).

B.F.

[kimboy2] 07/3/2007 14:52

Very surprised Greg Hallet is still there. You would have thought seeing profits were getting on for £3m out from forecast on a turnover of £5-6m he would be first in line as the CFO.

[jonwig] 07/3/2007 14:42

looked to me it was 'business as usual' ?

... for the chaps with Ps and BMWs - who might be the vultures rather than them inside?

[take stock] 07/3/2007 14:29

today i visited the TMG building in Bromsgrove, its just off the M5.

i did not enter the building but my observations were -

Porsche 911?

two BMW's

and a private TMG style plate on a vehicle, in the car park

i noticed people milling around inside the building

looked to me it was 'business as usual' ?

this is only what i saw. i dont know if it helps, may be not ??

IMHO DYOR