Teliti Share Discussion Threads

[blank frank] 05/4/2007 18:19

"Our greatest glory is not in never falling, but in rising every time we fall."
- Confucius





Happy Easter to one and all!

B.F.

[stemis] 04/4/2007 08:01

I hold ATCG.

God I hope they don't buy TEL. I hoped I'd seen the last of that business!

[blank frank] 03/4/2007 18:30

AT Communications (ATCG) floated on 25 July 2005. At that time it looked more like an IT business than most telecoms businesses, though obviously there is some overlap. But ATCG's acquisitions of Sterry and Britannia Telecom since then appear to give it more telephony maintenance capacity. Interestingly, Sterry made pre-tax profit of £108K. in its last year before acquisition, but was acquired by ATCG for £6.27M.

Britannia Telecom had turnover of £5.465M. and pre-tax profit of £431,000 in the year before its acquisition, and was acquired for £3.84M.


As there appears to be some degree of convergence between the two sectors, there could be quite a bit more acquisition (or merger) activity similar to this to come. And in this respect, TEL could represent a quite mouth-watering opportunity for an IT company expanding into telecoms, or wishing to do so.

TEL's turnover is likely to be more profitable as part of a larger company, due to economies of scale:-
* 'fixed' overheads should have a less than proportional impact;
* increased buying power can reduce costs.

There should also be other benefits:-
* reduced competition;
* cross-selling opportunities.

The opportunity to cross-sell into TEL's quality client base is likely to be particularly attractive to a predator. Especially as TEL's excellent service delivery has won the trust of its clients - which is why TEL has been successful in increasing the size/length of existing contracts.

TEL itself meanwhile could benefit from being part of a larger group, with the support of that group.

B.F.


P.S. Of course, if more than one company wanted TEL a bidding war could result. E.g. as with Pipex Communications:-

23/03/2007 07:03 AFXF Four companies set to bid for Pipex today - report LSE:PXC Pipex Communications





P.P.S. Since floating TEL has announced the winning of several major contracts, and a major contract extension (Travis Perkins):-

05/11/2004 09:21 UKREG Award of contract


19/01/2005 11:21 UKREG Award of contract


14/02/2005 09:00 UKREG Award of contract


07/06/2006 12:47 UKREG Re Contract


15/06/2006 11:00 UKREG Trading Statement

[blank frank] 02/4/2007 18:29

The Maintel share price is going from strength to strength; at 216.5p it's at another all-time high:-



And MAI directors have consistently increased their interest in the company:-

02/04/2007 10:53 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


01/03/2007 09:30 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


01/02/2007 12:05 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


03/01/2007 12:46 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


30/11/2006 15:41 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


10/01/2006 09:25 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc


21/12/2005 14:51 UKREG Director/PDMR Shareholding LSE:MAI Maintel Holdings Plc



Meanwhile, AT communications has bounced back well in the last month:-



And ATCG announced today that EIGHT ATCG directors/managers have today bought shares in the company at 39p a share:-

02/04/2007 14:17 UKREG Director/PDMR Shareholding LSE:ATCG AT Communications


The company has also just raised c. £2M. gross in a placing at 37p a share:-

02/04/2007 07:07 UKREG Placing of Ordinary Shares LSE:ATCG AT Communications


B.F.

P.S. BF2 - have you changed your e-mail address? - Delivery to the following recipients failed: [e-mail]

[tenapen] 31/3/2007 21:33

Rock & Roll 2nd spot with + 23%

Ouch for Outsider, having a nighmare :-(

Thanks for the update BF.

[papalpower] 31/3/2007 04:10

Very interesting BF.

Well, I'll comment on LEAD.

Sadly we are presently seeing the effect of one Nomad/Broker out, and a new Nomad/Broker coming in, so at this stage we are still seeing the clients of the old Nomad Altium depart.

A wise more by Leadcom in dumping Altium, as Altium imo had lost the plot and were not offering objective guidance (rumours are of a nasty breakup and Altium writing down the potential, something Untererg are not doing).

Anyway, presently we are seeing Altium (the departing one)offload their clients (it might be finished now) and Panmure Gordon have been appointed, so should be bringing their clients in soon. The Q1 trading update is due after Easter, and all being well we should see decent moves soon.

Lastest Broker Notes and Info is here :


Therefore, in the coming 6 months I am expecting a decent move upwards by Leadcom, and no longer to be bumming around the 50p to 55p levels.

[blank frank] 30/3/2007 18:52

Compare and contrast:-

Football League Division One 1972 final table, top four:-
1. Derby County: 58 points
2. Leeds United: 57 points
3. Liverpool: 57 points
4. Manchester City: 57 points


Telecoms Shares You Should Buy Tips League Table, 30.3.07, top four:-
1. PXC: +53.63%
2. GETM: +53.57%
3. FTS: +53.33%
4. RED: +52.82%

[blank frank] 27/3/2007 20:40

ZTC ZTC TELECOMMUNICATIONS PLC ORD 10P

As at 27-Mar-2007 20:21:23
19.000 +0.50 +2.70%

Bid Offer Volume High Low Last Close
18.00 21.00 140,641 19.70 18.00 19.00 on 27-Mar-2007

Last 5 trades
Time/Date Price Volume Trade value Type
16:08:38 27-Mar-2007 18.00 100,000 18,000.00 Ordinary Trade
14:18:23 27-Mar-2007 19.70 2,462 485.01 Ordinary Trade
12:46:39 27-Mar-2007 19.25 450 86.63 Ordinary Trade
12:34:34 27-Mar-2007 19.22 5,141 988.10 Ordinary Trade
12:33:31 27-Mar-2007 19.60 3,544 694.62 Ordinary Trade

[blank frank] 27/3/2007 20:36

21 March 2007

AIM placement for ZTC Telecommunications

ZTC Telecommunications designs, assembles and markets mobile telephone handsets under the "ZTC" brand. The Company was founded in June 2003 by its major shareholder, Charles Huang, and commenced business under the name of Shenzhen Zhong Tian Communication Equipments Co.

In 2005, ZTC was awarded a GSM handset manufacturing license, enabling the company to design, assemble and market its own handsets under the ZTC brand. These events, in combination with the concurrent development of an extensive distribution network, allowed the company to considerably increase revenues to RMB195 million and net profits to RMB26 million in the year ended June 2006.

Commenting on the admission to AIM, ZTC Telecommunications CEO, Charles Huang says:

"We have been pleased with the company's successful placement on the AIM Market. Our directors believe the profile created by joining the market, combined with our focused product strategy will have the potential to considerably increase mobile phone penetration in key targeted areas."

London Stock Exchange's Head of Asia-Pacific, Jane Zhu
adds:

"We are delighted to welcome ZTC Telecommunication to AIM, where it joins an increasing number of ambitious companies trading on what is the world's largest and most success growth market."

ZTC buys mobile phone components from suppliers and assembles new generation 'ultra-slim' handsets using its own and contracted outer-casing designs. The Company, which also assembles for OEMs, produced 748,930 handsets in the twelve months to 30 June 2006. ZTC was credited with ISO9001 (2000 edition) on 17 January 2006.

[blank frank] 27/3/2007 20:27

Kimboy,

Surely you don't think that TEL's Chairman Lord Razzall is being deceptive in these parts of his letter of 22nd. March:-

"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."

You say:-

" ... Given that it is incurring substantial trading losses on not a lot of turnover I can't see them getting much. ... "

The trading losses were for a year ending nearly eight months ago. Could the situation now be different? It could be; e.g. if the company incurred sizeable costs in costing and winning contracts, before the revenues from those contracts started to roll in. In fact, that's been the straw that I've been clinging too, although I haven't wanted to unduly raise people's hopes until there was something tangible from the company as to how things were panning out.

The company seems to be attempting to trade its way out of its difficulties. A takeover may still result if a predator is attracted by its low share price; but rather than TEL going cap in hand to beg for someone to buy it, the buyer would be the one coming to TEL, which is all the difference in the World.

And TEL's turnover is I think higher than you suggest.

Interim turnover for the half year to 31.1.06 was £2.709M. Second half turnover should be higher because of a fuller contribution from the Westcom acquisition, and organic growth. Perhaps c. £6M. for the year end 31.7.06 - we should know very soon. (And turnover for the current half year to 31.1.07 should also show a half-on-half increase, because of the Datatel acquisition, and organic growth.)

TEL's acquisitions suggest that a price of about one times sales can be paid for this type of company. At £6M. that would be £1.18 per TEL share.

Even after a £2.2M. loss, the company should still have net assets of c. £0.3M. (including intangibles), in view of the c. £1.1M. net (after the Datatel payment) raised in October through the issue of equity. And hopefully net debt will continue to be manageable.

In addition, it will have tax losses of c. £4M., which could save over £1M. in tax later.

TEL's largest value though should reside in the value of its actual business: its many contacts with clients, including blue chips, with a good proportion of recurring revenue; and its skilled staff - probably numbering over eighty now.

B.F.

[kimboy2] 27/3/2007 20:04

Frank
I suspect that you are deceiving yourself with regard to the future of the company.

As I see it there are only 2 possibilities;
1. Sell it off for what they can get. Given that it is incurring substantial trading losses on not a lot of turnover I can't see them getting much.

2. A rescue funding to pay the bank off and reorganisation costs. The only advantage of this for someone over (1) would be that it was listed and perhaps allow them to pursue the strategy that TEL failed to do.

I can't see much for the present shareholders in either case.

[blank frank] 27/3/2007 19:16

Thanks Brechin.

Strange that Greg Hallett should have resigned on (or at least with effect from) a Sunday:-
26/03/07 15:28 UKREG Directorate Change
"Telephone Maintenance Group Plc
Telephone Maintenance Group Plc announces that Gregory James Hallett resigned as
a director from the board with effect from the 25 March 2007.
Enquiries:
Jeff Williams, Managing Director
Telephone Maintenance Group Plc 01527 881 800"


Coincidentally, the same day as I posted above:-
Blank Frank - 25 Mar'07 - 14:59 - 259 of 263 edit
" ... Hopefully the company will clarify what has happened to him in due course."

One might be forgiven for thinking that TEL were reading this board ...

I have mixed feelings about Greg Hallett's resignation as a director. He seemed a really nice guy, and a great 'people person', as well as being strongly committed to the company. However, he may well have been ultimately responsible for the fiasco over TEL's forecasts, and if so he had to go, if only to help restore TEL's financial credibility. I do though wish him well in the future. I would also like to welcome TEL's new Finance Controller, Mark Godfrey; perhaps at some point he will step up to being a Finance Director for TEL.

Another major step to help restore investor confidence (and support the share price) would be some director share buying when TEL's shares are de-suspended. This would be the first such buying since TEL floated two and a half years ago, and would not be before time. Neither of TEL's two remaining directors can be short of a bob or two, and after recent events it's the least that they owe long-suffering shareholders. There can be no excuses. If it doesn't happen, observers might justifiably wonder whether they really believe in the company.

So here's hoping that Messrs. Williams and Razzall will shortly razzle-dazzle us with some BIG director share buying.

Jeff Williams, Chief Executive Officer, TMG PLC:-





(Lord) Tim Razzall, Chairman, TMG PLC:-





B.F.

P.S. Any shareholder (or indeed non-shareholder) who agrees please post your support below.

P.P.S. TEL's directors will of course have to wait as necessary until any "close period" is not a restriction upon their buying. This may mean waiting until after TEL's interim results for the half year ending 31.1.07 ... though under AIM rules these are due by the end of April, so not long to wait.

[blank frank] 27/3/2007 18:36

As at 27-Mar-2007 18:16:53
20.500 -12.00 -36.92%

Bid Offer Volume High Low Last Close
19.00 24.00 458,069 28.50 19.00 20.50 on 27-Mar-2007

Last 5 trades
Time/Date Price Volume Trade value Type
16:39:54 27-Mar-2007 25.00 10,000 2,500.00 Single protected transaction
16:16:09 27-Mar-2007 19.60 3,960 776.16 Ordinary Trade
16:13:43 27-Mar-2007 21.85 5,000 1,092.50 Ordinary Trade
16:11:36 27-Mar-2007 20.00 7,500 1,500.00 Ordinary Trade
16:05:50 27-Mar-2007 20.00 2,000 400.00 Ordinary Trade

[2lb] 27/3/2007 08:18

SIN has taken an alimghty battering today........

[the bull] 26/3/2007 16:27

Another city equities dissaster eh. I presume all these no execs resigning spells trouble?

[jonwig] 26/3/2007 16:20

They seem to be in catch-up mode:

Telephone Maintenance Group Plc announces that Gregory James Hallett resigned as
a director from the board with effect from the 25 March 2007.

[jonwig] 26/3/2007 09:04

Thanks brechin.

This is all part of the new IFRS business, which they seem to have adopted without understanding the requirements.
And because an impairment has to be shown on the P & L account, a small profit can turn into a huge loss.

Another company, Surface Technology (SRTS) seems to have hit the same problem this morning!

[brechin] 25/3/2007 20:12

An "impairment review" means that the assets have to be reviewed annually and the value has to be justified. If, for example, there is goodwill in the Balance Sheet and the goodwill arose from buying a business which is now loss-making then the goodwill would be written off unless the auditors could be persuaded that the loss was only temporary.

[blank frank] 25/3/2007 14:59

Totally agree BF2 - still being in the game is great news, as administration seemed to be a very real possibility, and perhaps even the most likely one.
TEL's announcement two months ago today contained the following dreaded phrase:
" ... the Board has requested an immediate suspension of the quotation on AIM of the Company's shares pending clarification of the Company's financial position."
I don't recall an instance of a company's shares being suspended to 'clarify its financial position' where it has not gone bust, which means that a TEL survival could be quite a historic event.

As regards Greg Hallett; he is indeed still shown as a director on TEL's website:
Greg Hallett
Commercial Director and Company Secretary

And there's been no announcement about him ceasing to be a director.
But Tim Razzall's new letter clearly states that:
"Mr J S Williams CEO and I are left as the only Directors of the Board."
Hopefully the company will clarify what has happened to him in due course.

I'd also appreciate it if anyone is able to clarify the meaning of this please:
" ... further losses generated by an impairment review under the new European accounting standards."
What are the nature of such losses?

Thanks.

B.F.

[stemis] 25/3/2007 12:10

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.

I'll be interested to see how this statement reconciles with their announcement of 25 January 2007:-

Since the announcement on 22 January, it has emerged that the losses for the
year ended 31 July 2006 might be as much as £2.2m, including trading losses of £1.4m.

A*se and elbow still springs to mind.

There seems a fundamental issue here of TEL's ability to identify the truth and to communicate it to the market.

[blindfaith2] 24/3/2007 17:21

ps, BF - thanks for typing the whole thing in.

[blindfaith2] 24/3/2007 17:19

It must be noted though that the letter does say "indicated that the accounts to 31st July 2006 would show a small profit".

From memory I thought that they had stated that the expected results were roughly in line with expectations, that being the case I thought we were expecting more than a small profit and more of a half decent profit.

However, still being in the game is better than I thought up to today.

[jonwig] 24/3/2007 16:45

Thanks for that BF.
Also, note that GH has doubtless departed. ("Mark Godfrey, who was appointed in February 2007")
GH is still listed as a board member on the website, but his departure isn't mentioned in your letter!

When they do publish the accounts ("shortly"), I hope it will be an RNS, rather than a letter to holders only. I'm not clear on the rules for suspended shares.

Anyway, just as the MMs were asleep when the bolt struck, maybe they'll be asleep again when the suspension is lifted.
Who knows, there may be life in this old dog yet ...