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ATC 16.0¢

Comments please


  1. (1) Not being a telco expert, is the whole object of this excercise to get the FNTS mobile minutes onto the ATC network? If so, does ATC have the infrastructure to carry this extra capacity? I presume it dosent since it hasnt connected all its existing customers yet.

    If 210m of combined traffic is pumped through the ATC network and assuming current customers will cover operating costs, then the FNTS tarffic will be on GP margins of around 10%. A big difference from 40%. But the 40% supposedly relates to current traffic.

    ATC is paying effectively 77m to generate say 20m profit a year. I guess not bad in the scheme of things.

    (2) If we use a conservative P/E multiple of 10 and maintainable profits of 27m, then the share should be around 90c. Hence, once the forecast becomes actual we should expect the price to drift upwards.

    (3) Big plus that the interest bearing debt holders converted the debt to equity. A good indicator that these people dont expect the share price to go under 42c.

    (4) The announcement says that FNTS is profitable, however when you look at their balance sheet to 31/12/01, there are no retained profits but actually accumulated losses. Perhaps the retained profits have been paid out as dividends. Can this be confirmed?

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