The results for this company are out in July for 2004. The consensus forecasts are:

an increase in turnover from 21.76 million(2003) to 26.1 million (2004),
and profit before tax from just over 1 million(2003) to 1.9 million (2004)

The figures are from Hoodless Brennan, analysis sheet available on their website.
www.hoodlessbrennan.com (click on research and prices).

I am hoping the share price has bottomed out as I bought a small holding yesterday at 8.5p

thanks someuwin..nice summary and worth holding on for what should be at least a double bagger over the next 6/12 months (imho)

Young gun fires SpiriTel into front rank position

30 May, 2008 - 09:51

When 32-year old Alastair Mills moved into the hot seat at failing service provider SpiriTel in 2005, his aim was to achieve much more than being one of the youngest CEOs in the comms industry.

Mills' considerable challenge was to bring the company back from the financial brink. Three years later, Mills has more than succeeded in his quest thanks to an acquisition-led growth strategy, turning SpiriTel into an integrated B2B service provider with 2,000 customers that will scale the 21 million barrier within the next 12 months.

"I had joined from Telewest the previous year to run the company's main wholesale subsidiary (Expo Communications)," he said. "But the business was struggling and by 2005 it was technically insolvent with just six customers and one wholesale product. "I wanted us to own our business customers, which is quite a challenge when you have a legacy of poor financial performance. But during the course of the last three years, we've raised 8-9 million and completed five acquisitions.

"It's been a process of two elements - consolidation and cross-selling. We now have a full range of systems, on-site and hosted, to offer. We have a mobile offering, and we recently won the largest VoIP deal in the UK on the strength of our relationship with Mitel. We're a full business ISP and we have our own next-generation network and core IP backbone. Last year we grew from 13-16 million and next year we'll be a 21 million business. Our share price is up 75 per cent. We're well-positioned in terms of financial performance and the scale of capital we can raise, and you will see us making further acquisitions."

Mills is bullish about current market conditions. "At the moment, we're not feeling the pain," he said. "Where others have struggled, our new bank has just lent us 2 million. In such tough times, that reflects what we've achieved. When a phone system breaks, you can't not fix it just because the interest rate has gone up. You can't stop making calls just because the bank won't lend to you. Your sales guys still need to make their mobile calls."

SpiriTel, according to Mills, is well positioned to surf market trends that are simply emphasised by tough trading conditions - the shift in accounting for comms spend from CAPEX to OPEX, and rising demand for hosted services. "We're a fully integrated, one-stop shop with a diverse and future-proof product set," he said. "That's what you need when the pace of change is so frightening. I was looking at a Blackberry with Satnav the other day - increasingly, you've got one device that does so many things."

Another subtle shift in SpiriTel's strategy took place in January when, with the scale of its network and product set in place, it focused with renewed vigour on developing routes to market and started to court resellers and dealers with its hosted VoIP service. Mills had already noted the approach of some resellers on the strength of SpiriTel's credibility with the Mitel platform. "To get a hosted VoIP product in place is a complex business and we've made a lot of mistakes along the way," he said.

"You have to back the right horse and we're backing Mitel. Customers' voice services are too business-critical for them to take a risk on new start-ups. The underlying platform provider is crucial. The guy in the street knows the likes of Mitel and Nortel. And now we can present real users to the channel. Resellers can expect to hear a lot from me in the months ahead."

Mills' eye is set firmly on the relatively low churn of the systems reseller sector. One-trick ponies - call and line dealers - are, he said, particularly vulnerable at the moment. "It's a clichbut customers are looking for an integrated SP," he said. "They used to have five suppliers but now they want it all under one roof. It's a really tough time for dealers who are being squeezed out on deals, because it inevitably increases churn and that devalues the company. I'm not saying these guys don't have value. There are some loyal customers out there and many of these companies are sitting on real value and there still an opportunity for principals to make a lot of money. And if we can cross-sell into them we'll really be able to extend our reach on the hosted side."

Mills said he's excited by consolidation in the market. Acquisitions will continue to redefine the landscape, he suggested, and he expects SpiriTel to play a full role in the game. "We see it as an opportunity. I was just speaking to a broker doing research on an IT company who'd identified 40 potential acquisitions! There are 1,000 resellers out their in the sub-5 million turnover bracket. In the next five years, they could all be up for sale. Show me another sector like that in the UK comms channel."

Mills said that in the long term, the market could be dominated by 10 giant resellers-cum-integrated SPs. "The interesting thing is, who will end up buying the large guys? Who is going to buy the Tiscali base? If Vodafone does, a mobile operator will get into fixed line and broadband on an unprecedented scale. All bets are off."

http://comms-dealer.eu/company-profile/young-gun-fires-spiritel-front-rank-position

I've been playing with the numbers

The last Daniel Stewart research note on STP (10-Mar-08 rating BUY target 2.01p) was issued before the recent earnings enhancing acquisition of mobile reseller NW1.

The Broker Note predicted full year earnings for April 2010 of 19.61 million and Earnings Per Share of 0.26p.

However, in a recent interview (30 May, 2008) Alastair Mills (CEO) stated:

"Last year we grew from 13-16 million and next year we'll be a 21 million business."

So, extrapolating from the BN figures, sales of 21m next year would produce EPS of 0.31p.

With the current SP of 1.26p that puts Spiritel on a lowly forward P/E ratio of 4!

A PER of 10 would give an SP of 3.1p
A PER of 20 (not taxing for a high growth telecoms co) would give an SP of 6.2p.

So, SP far too low at the moment based on current/projected earnings. But we know that STP is in acquisitive mode - from the same interview:

"We're well-positioned in terms of financial performance and the scale of capital we can raise, and you will see us making further acquisitions."

So - more acquisitions - more earnings. Expect to see the SP go significantly higher from here.

Cool ! onwards and upwards!