ATCG Results due monday expected to be good, returned to profit last interims, major new contracts won recently with Vanco, Siemens and extended contract with BT for a further 6 years. Share price has suffered lately due to Mark Woodbridge leaving (he was previously director of Torex Retail June 2000 to 2003). Expect a strong recovery on back of these contract wins and aquisition of Rocom

AT Communications Group Plc
06 December 2006

6 December 2006



AT Communications Group Plc

Trading update and major new contract win



AT Communications Group Plc (AIM: ATCG; 'ATC' or the 'Group'), one of the UK's
leading business to business communications groups, today announces a trading
update for the year to 31 December 2006 including expected profits and progress
on the integration of Rocom, as well as a major contract win with Siemens.

Trading continues to be generally strong, with the Group awarded a substantial
new contract with Siemens Enterprise Communications for online services using
Rocom proprietary e-trading platform, RocomX, as well as the provision of
managed services.

The Board expects to secure additional contracts during Q4 but the bulk of these
revenues will be recognised in 2007. The Group expects to report pre-tax and
pre-goodwill profits in the order of 4.5 million, having reported a loss in the
previous financial year. The Board also expects to pay a maiden dividend for
the year to 31 December 2006.

Since the Rocom acquisition in August 2006, the Group has largely completed the
reorganisation and integration programme and will fully operate as three key
business units with effect from January 2007.

The Rocom brand is now used for all distribution and channel customers with ATC
indirect (channel) customers now serviced by Rocom, as service teams of both
organisations are fully integrated. Cross-selling opportunities across the
direct sales teams are also already being exploited.

The Group is about to launch a newly branded Service division which comprises
engineering and technical service delivery to direct and channel customers as
well as third parties such as BT and Vanco.

A little surprise is the rise in net debt.


DS comment this morning :

AT Communications - BUY

Price: 49p Target price: 70p Code: ATCG.L Analyst: Mike Jeremy | 020 7776 6570

1H 07 PBT 2.3m (adj) but net debt 19.8m

AT Communications reported 1H07 revenues at 42.7m (+11% underlying growth), adjusted operating profit of 3.0m (unadjusted 1.842m compared to 1.954m in 1H06), adjusted PBT of 2.3m (unadjusted 1.097m vs 1.778m) and interim EPS of 2.1p (1H06 2.5p) inclusive of dilution resultng from the issue of new equity totalling 6.7m.

The (negative) surprise is net debt, which increased from 18.51m at y/e 06 to 19.8m, a factor ATC attributes to additional working capital requirements.

We expected interim net debt to be closer to 10m following the sale of Rocom's Wetherby offices for 3.5m and two equity issues which together raised some 10.2m towards debt reduction.

At divisional level, ATC Solutions recorded revenue of 16.4m (our estimate was 16.1m), Servassure 6.5m (DSC E 8.3m) and newly-acquired Rocom 19.8m (DSC E 21.7m), clearly indicating a loss of momentum at the profitable Servassure level.

In sum, the focus must be net debt and AT Communication's strategy for future control / reduction. Net debt now stands at 2.5x FY07 EBITDA (E).

Ah right - thanks for that PP.

Have ATCG on watchlist, the interims look OK and like Toya was surprised at 5p fall this morning. The ony reason I haven't invested yet was a nagging worry about debt levels, I was waiting for debt to decrease. Debt at 19.8m with interest payment of 0.700m is still high, and I would hope that going forward, they will address his issue.

Still keen to invest at some time in future, I believe when debt levels are seen to be reducing the sp could really star to move up. imo

If you take out one off's, the underlying EPS is 3.4p..........not sure why they did not highlight this...........anyway, yes debt is a concern, but the company is growing and should do 6p EPS this year.

Cheap really.

Good to see it come off the low, not good about the debt, this should be a priority to reduce it, however hopefully most of the investment costs have been shown and they can now start to produce further growth in business and earnings, which should start to reduce the liabilities. As you say Papal this stock is still cheap.

Future is bright.

Don't forget this is Interims to 30th June 2007.

The placing was in July 2007, and so, the money raised then to reduce debt and also to increase working cap is not recorded here, it will only come into play on the prelim figures.

27 September 2007

AT Communications Group plc
("AT Communications" or the "Company")

Director Shareholding

The Company has today been informed that Alex Tupman, Chief Executive of AT
Communications, today acquired 330,000 ordinary shares in the Company,
representing 0.43 per cent of the Company's issued share capital at a price of
45p per share. Following the acquisition, Mr Tupman has a beneficial interest in
12,071,018 ordinary shares, representing 15.6 per cent of the company's issued
share capital

Well that's a good sign I guess.

He's probably been waiting eagerly to get the interims out of the way, and was blessed by a cheaper price. I'm sure he'll be smiling in due course.

Re Debt: Papal thanks for pointing the dates out, we can assume the balance sheet is in fact alot better. look forward to next set of interims.

Papalpower
re post 78 the comment from DS this morning, surprised they seem to have factored in the July placing which as you point out was out of the reporting period.

Here is the new broker update, from the new broker, Cenkos, thanks to a post at AFN :

"rivaldo - 28 Sep'07 - 15:11 - 692 of 692

I have the new Cenkos note. It's pretty definitive. They have a 70p target, and they forecast 7.7p EPS for this year on a 13% tax rate and 7.1p EPS next year on a 30% tax rate. They say:

"Undervalued on every measure

AT Communications (ATC) has reported encouraging interim results today with
significant progress made on a number of fronts during the period: Rocom and
Britannia, acquired in 2006, have now been fully integrated; the restructuring into 3 operating divisions has been completed and the group has recruited almost 60 new staff to help drive and support the growth anticipated in the short to medium term. It is clear that this restructuring is beginning to deliver results, with over 100 customer cross selling opportunities in the pipeline and a number of landmark deals announced recently.

We believe that ATC is on track for a strong second half to 2007 and that the run-rate will make our 2008 forecasts look very comfortable indeed.

ATC looks compellingly cheap on every measure and we believe that there is significant scope for a re-rating during the remainder of this year.

Results

ATC delivered a 25% increase in PBT to 2.3m (stripping out exceptionals and amortisation costs) on sales up 168% at 42.7m. This increase in PBT was achieved despite the significant number of staff added during the period and a 0.5m increase in the interest charge to 0.7m - to service the debt taken
on in August 2006 to finance the acquisition of Rocom. EPS decreased to 2.1p (2.5p) primarily due to exceptional costs and amortisation. Stripping out these costs and normalising the tax charge gives EPS of 2.6p. Debt increased to 19.8m (18.5m) during the period due to the increased working capital
requirements of the business, but a placing in August raising 4.8m (net) together with operating cashflow in H2 should see debt levels fall to c15m by the end of the year. Interest cover remained very comfortable at almost 4x.

Growth and Visibility

ATC has established a strong platform for growth in the first half of 2007. The group now has a compelling product offering and the ability to reach a very broad target market, ranging from the smallest to the largest companies in the UK. Organic sales growth of 11% in the first half was achieved
despite the upheaval of the reorganisation and at a time when 60 new recruits were being integrated and trained. We believe that the building blocks are in place to deliver growth in excess of this level in the medium term. Furthermore, the transition towards more managed service revenue and longer term contracts in general is likely to significantly improve the quality of the group s earnings in 2008 and beyond.

At present, c60% of group revenues are contracted and recurring - we expect this number to be nearer 70% by the end of 2008. We believe that on a PE of 7 to December 08 the market is significantly undervaluing ATC s earnings stream."

Nice little write up on ATCG.


http://www.sharecrazy.com/tipsheet/atcg.html


.

Thanks for that PP - might as well do some background reading while waiting for Moneyam to stream prices to us again...

2 page comment on the interims is out from Edison ;

http://www.edisoninvestmentresearch.co.uk/research/category/AT%20Communications

Oct 01 2007

Rerating overdue

AT Communications (ATC) reported interim results last week ahead of market expectations. A strong sales pipeline will underpin growth in the second half and well into 2008/09. After a period of investment and reorganisation, management focus is on organic growth, which we estimate will be at a level of 10 to 15% per annum for the next three years. We believe that the shares, on a P/E of less than 6x 2008 earnings, represent a significant opportunity for rerating to more...............................................

PP this share has been heavily punted by TW and LH are you part of this group?

halifax, LH has only recently tipped ATCG, and TW never has. Perhaps your referring to Share Crazy printing the LH tip ?

I have been in well before LH made his call on ATCG.

Considering I have been posting here well before LH made his buy call, why do you consider that I would be part of this group ? Seems strange to me...........

Recent interims encouraging on sales front, but business remains highly geared and in present climate I am now out.

http://www.investorschronicle.co.uk/Columnists ......



Interest in telecoms is reignited

Created: 3 October 2007 Written by: David Malony

Investment banks have raised their recommendations on European telecoms operators in the past month, but this does not mean it is any easier to see which companies have found a winning formula. Indeed, the real action is likely to be found at the smaller end of the sector.

For several years now, telecoms companies have been fighting declining voice revenues. Selling broadband has helped, but subscriber addition rates are slowing down. So telcos are now following IT services companies into managed services. But the real pay-off will come from next generation networks they are building, such as BTs 21st Century Network.

These services will be hosted in data centres and virtual (shared) servers and billed as service and applications-led contracts, instead of charged on time or bandwidth used. Internet applications from telephony to productivity software will also be managed from the new network. As a result, upgrades, user admission and performance monitoring will be quicker and better co-ordinated.

Telecoms and software consultancy Ovum estimates that in the UK alone this market is currently worth 2.1bn (excluding traditional voice services or mobile services) and is set to grow to 2.8bn by 2010. There are no clear market leaders yet and new service providers include Alternative Networks, Azzurri Communications and Matrix Communications (not listed, but a subsidiary of Dublin-listed Calyx Group), as well as more familiar names such as Pipex, Redstone and Thus.

These UK companies are modelling themselves on a combination of IT systems integrators and telecoms network resellers, following the example of Vanco, a virtual network operator that started out as an IT distributor. And all are launching more network-based managed services such as Thus' recently launched Demon virtual server.

Admittedly, service providers do not have the scale of the incumbents, but this can work to their advantage in picking up business from companies that want bespoke network service. And given their modest size, they are all vulnerable to being taken over, too. However, the big telcos are also biting back by bolstering this side of their business. For instance, BT has made a number of acquisitions in traditional IT services - like Basilica Computing and, just last week, Lynx Technology in the UK, CS Communications & Systemes in France and SA in Belgium.

ATCG looking oversold, has been caught up in fears over its contract with Vanco. Vanco has cash flow problems but its order book is at very healthy levels, concern is it could reign back its orders with ATCG.

Even if this is the case, ATCG has shown itself to be quality operator in telecoms market with many other blue chip clients and this is likely to continue to grow.

Could therefore be due a likely recovery soon, good opportunity to get in. DYOR

THought this was due an update, seems stuck at the bottom at present but news is all good.

Recently renewed and increased a contract by 2.5 million a year and director buying.

p/e currently about 7.

Expect to see 50p in the medium term.

The Company was informed on Friday 16 November 2007 that Alex Tupman, Chief
Executive of AT Communications, has acquired 500,000 ordinary shares in the
Company, representing 0.65 per cent of the Company's issued share capital at a
price of 34.5p per share. Following the acquisition, Mr Tupman has a beneficial
interest in 12,597,044 ordinary shares, representing 16.3 per cent of the
Company's issued share capital.