princess
- 29 Mar 2004 11:23
I know there's an existing thread for TEP, but I'm blowed if I can find it.
Anyway, things aren't looking too good for this share at the moment. Been on a downward spiral for some weeks, after hitting over 4.
Very low volume today, and sells seem to equal buys, so why the continuing drop? Seriously thinking of getting rid, and taking what is now a very small (and I mean small!) profit.
Any experts on TEP like to add their two pennorth?
Princess
EWRobson
- 01 Sep 2004 20:06
- 29 of 153
azhar and rampage. Having completed the above note, it has struck me as relevant to investing timing that the company's Express Day, attended by well into four figures of delegates, is on 17th October. This is times partly to allow the half-year figures to be discussed; these are then effectively in the public domain. Last year there was an announcement on 17th September on trading upping the forecast and announcing an increased interim dividend. It may well be, although this is surmise, that news giving encouragement to the share price is with us sooner or later. I hope personally not given that my funds are tied up. One thing I am very positive about is that the shares are currently at the bottom of a trough - see my previous entry for a six month prediction.
Andy
- 01 Sep 2004 21:13
- 30 of 153
EW,
Ok here's the longer term chart.
IMHO the downtrand that started in January this year is still intact.
I'm not sure TEP's business model is as sucessful as is being made out, or at least was, previously. Customer sign up is slow, and the customer base is only growing steadily. As an example, Carphone Warehouse signed up 50,000 landline customers to their service in less than three months, whereas TEP took over 3 years to signup 120,000 customers.
More nad more competition is entering the fray, and now British GAS has achieved the landmark of being the first alternaive telephony provider to BT to provide a complete service to the home, ie they do not require their customers to rent the line from BT!
I am a TEP telephony customer, and I have checked the gas and electric tariffs. and they are not as competitive as they were, but are cheaper then my supplier, and I may well switch. However, they never try and entice me, nothing included with my monthly phone bill to tempt me, which seems strange!
azhar
- 01 Sep 2004 22:44
- 31 of 153
looks nasty. Looking at the director dealings we see even they thought 400+ was a bit too high a bit too quick. They have been adding to anything below 350. Me thinks things should start picking up as todays price is 52 week low and considering that there is nothing out there in the public domain to keep the price down.
Name Date Type Amount Price Value Holding (%)
Charles Wigoder 08/07/2004 Purchase 100000 245 245000 15348541 24.957
Charles Wigoder 06/04/2004 Purchase 10000 313 31300 15248541 24.794
Charles Wigoder 06/04/2004 Purchase 30000 315 94500 15238541 24.778
Keith Stella 30/03/2004 Purchase 3500 323 11305 43500 0.071
Charles Wigoder 30/03/2004 Purchase 10000 324 32400 15208541 24.729
Charles Wigoder 30/03/2004 Purchase 50000 323 161500 15198541 24.713
Dominic Wheatley 22/01/2004 Sale 25000 402 100500 243060 0.386
Peter Nutting 22/01/2004 Sale 100000 402 402000 851750 1.349
Charles Wigoder 03/12/2003 Sale 1325000 350 4637500 15148541 24.88
John Levin 28/11/2003 Sale 30000 349 104700 2257996 3.709
azhar
- 01 Sep 2004 22:55
- 32 of 153
Turnover (m)
2000 19.20
2001 28.11
2002 32.68
2003 58.04
2004 81.83
2005 ?
It certainly looks interesting. Growth year on year. These figures now explain the above graph by Andy.
EWRobson
- 02 Sep 2004 14:00
- 33 of 153
Andy,
Thank you for the extended graph which bears out my comments. There are several ways of reading this: (1) Project the slow uptrend from September 2001 to sept 2002 giving a current value of about 160p - this would be a cautious view given the improvement in subsequent trading; (2) project the improved uptrend from Sept 2002 to July 2003 giving a current value of about 350p - this would be a reasonable view reflecting the increased trading during the period, subsequently strengthened; (3) Combine those two epriods on an exponential basis reflecting the exponential increase int rading over the period to early 2004, giving a current value of about 400p - an optimistic view that would be only viable if the exponential increase were to be maintained. There is little doubt that the shares became over-heated in the second half of 2003; on any of my projections we would be in a correction phase, probably nearing its end. The missing piece of data, obviously, is current trading levels. My preferred option (2, above) probably implies turnover of between 105 and 115K this year with corresponding pbt increase.
Your comparison with Carphone Warehouse, indeed the supermarkets, is interesting. These services are launched with heavy advertising expenditure and point of sale support. TEP advertising revenue is negligible as they are relying on their distributors, paid on a commission only basis, to introduce new customers. However, their sales increase should be better than a straight line given that each distibutor is also incentivised to introduce new distributors as well as customers and each customer is also a prospect for additional services. I do agree that they do not make full use of their monthly bill for promotional purposes. This month, though, their broadband offering is well explained and I am in the process of transferring, broadband having belatedly arrived in the backwoods of East Sussex. The BG offering is potentially good news as I would guess that TEP are already talking to them (and BT) to reduce their direct costs.
Azhar. Your director purchasing summary is very helpful. I agree with your reading. The director purchases support a price of 3+, with 4 being too soon. For those who bought in at around 4, most certainly hold but better accumulate to bring the average purchase price down. On my projections above, look for 4 later in 2005.
Fred1new. Fascinated by your graphs. What is the source for an explanation? I think the momentum graph is particularly helpful in sorting out the wheat of new investment from the chaff of short-term trading and price manipulation by market makers.
Eric
azhar
- 02 Sep 2004 17:42
- 34 of 153
EWRobson, you may be right. T+ was down further earlier but finished the day in blue.
Tplus Guy
- 03 Sep 2004 01:32
- 35 of 153
Hi guys and gals,,what can i say that hasnt already been said..Do not worry about competition and T+'s position for the future..Our results so far have been great and there are many new services planned,although they do take quite a while to roll out.This share in my eyes is long term,we execs really need to do more.
The problem is with new exec sign ups.As prices rise and money becomes tight there are more people looking at a biz with a difference so new execs will always come along,BUT they all want to be rich over night and in Network Marketing this does not happen..They must be patient and learn their craft well to bring in good results..
Anyway,i can only see up for this company,we will just have to wait and see!!
azhar
- 03 Sep 2004 08:37
- 36 of 153
we have movement guys. Recovery has begun as stated above by other posters.
Frampton
- 03 Sep 2004 09:12
- 37 of 153
It was tipped in Investors Chronicle today.
azhar
- 03 Sep 2004 10:46
- 38 of 153
No doubt they are right on this one. Well undervalued in my opinion looking at their track record.
azhar
- 03 Sep 2004 10:47
- 39 of 153
Frampton, anything else tipped in the IC?
azhar
- 03 Sep 2004 11:05
- 40 of 153
LONDON (AFX) - Shares in Telecom Plus made early progress after the Investors Chronicle advised readers to 'buy' the stock.
The IC said concerns about the rising oil price look overdone as the company has little in common with other alternative telecoms operators, and only a small proportion of profits come from gas. Given the growth potential, the rating looks too cheap, the magazine concluded.
Telecom shares were 5 pence firmer at 245 by 7.46 am.
azhar
- 05 Sep 2004 17:36
- 41 of 153
Sorry guys if this has already been posted as it is an old article but neverthless an intresting read. It was rated as a hold when it was 300+.
Telecom Plus gas concerns are mostly hot air
Published: 12:36 Wed 9 June 2004
By Joanne Wallen, Associate Editor (Citywire)
Those looking for the negatives in Citywire tip Telecom Plus' results today will spot the margin squeeze in the multi-utility company's gas business, but there are enough positives to outweigh this issue.
Chief executive Charles Wigoder told Citywire that since the wholesale price of gas has risen pretty much in line with oil prices, Telecom Plus (TEP) and all of the other residential gas companies are to some extent having to swallow decreased margins, since they cannot possibly pass on the entire hike to customers in one hit.
Wigoder said the gas companies would 'create a political storm' were they to increase prices to customers by 20-30% in one hit. What will happen instead is that prices will rise more steadily this year and next, and that margins will catch up in the longer term.
Not that Wigoder is overly concerned. Gas represents only a very small part of the business, which offers customers electricity, fixed telephony, mobile telephony and internet services as well. Margins in all of the other businesses remain, 'extremely satisfactory.'
Depending on where the commodity price of gas ends up this year, there could be a 1-2 million impact on Telecom Plus' profits. This is not insignificant for a company that in the year to March had profits of 10.6 million, up 90% from last year on turnover up 41% at 81.8 million.
However Wigoder points out that if Telecom Plus is feeling a little pain, the other utility companies are feeling a whole lot more. This is because Telecom Plus prides itself on having by far the lowest cost base and cost of customer acquisition of any of its competitors, and because it reckons it is by far the most efficient of the players.
'I'd be ashamed to call myself a businessman if I couldn't run a business more efficiently than the former monopolies. But we are an order of magnitude more efficient,' said Wigoder. Not that Wigoder should be ashamed to call himself a businessman anyway. He was after all the founder of The People's Phone Company, which he sold to Vodafone in 1996 for 77 million.
Earnings per share to March were 12.2p up from 6.8p and the company is paying a final dividend of 5.5p making a total of 10p for the year, up from 5.75p.
The number of subscribers increased by 33% to 178,000 and the number of services provided rose by 39% to 312,000. This reflects the company's success in selling more than one service to each customer Customers are recruited by agents or 'distributors', who basically sign up their friends and acquaintances in a sort of multi-level marketing arrangement, hence keeping the costs low. In the last quarter alone the company signed 1,500 new distributors, taking the total to 13,000.
Telecom Plus shares are down 10.5p at 313.5p.
Citywire Verdict:
We tipped the shares in May 2002 as a good buy at 109.5p and suggested taking a 'careful look' at whether to book some profits at 268p last November.
Clearly the gas margins have shaken investors this morning. However house broker KBC Peel Hunt has left its estimates unchanged. While it will wait to see how the next six months pan out in terms of gas prices, it thinks the company's 'visibility, yield and track record,' make it still an attractive investment.
At the current price shares are rated at 20 times this year's forecast earnings falling to 16 times next year. The prospective dividend yield is 3.85%.
It may not be the right time for new money, but with the dividend and the general outlook it should be reasonable to hold for now.
Frampton
- 05 Sep 2004 17:52
- 42 of 153
Azhar - sorry I don't know about other tips in the IC, I don't get it - I just noticed the Tplus recomendation on MoneyAM site under friday's newspaper comments round up.
azhar
- 06 Sep 2004 12:42
- 43 of 153
Decent volume going through. Up and awaay slowly but surely.
EWRobson
- 06 Sep 2004 21:31
- 44 of 153
azhar and Tplus Guy
Very interestin contributions. The article was a good summary, recommending hold at 300p plus. The price has withered for lack of news plus larger investors taking profits.
I think that today's trading is very instructive and proably typical. Excluding some early trades which are not on MoneyAM's list, there were 37 buys with average volume of 1100 shares and 13 sales of average volume 10,500 shares. I suggest that most of the former are TEP distributors, possibly investing their income; the latter are larger investors who are not as close to the action. To repeat a point already made, the gas problem is probably already going away. Taking what might be a pessimistic view of a shortfall of 2 mill. on profits, this will reduce a projected 4m increase in profits. PE will still drop to 16 and 2005 profits should make good the shortfall.
Its worth taking good not of Tplus Guy's comments because I believe him to be representative of TEP distributors. They do really understand network marketing and the cumulative effect of new distributors, also the policy of adding other income streams. TEP is not just telephone, or just utilities, it is a network marketing company whose primary asset is its distributors. Some fall by the wayside (like me) but there are many who are doing very well thank you and are, or expect to, making a good pile. Stupid writing positive stuff when I am out of the share at present, but I am benefiting from the exchange of ideas while I wait for ASOS to start getting over-cooked and then doing some switching, including TEP.
Eric
azhar
- 07 Sep 2004 08:52
- 45 of 153
Another tick up guys. A massive spread tho. I think the big spread keeps away T traders which suits me fine as I'm a medium to long term holder.
azhar
- 08 Sep 2004 20:05
- 46 of 153
yet another day with a decent rise. Is there something happening in the background ?
EWRobson
- 08 Sep 2004 23:23
- 47 of 153
azhar
Tplus Guy will hopefully comment. From my own experience of TEP, we are moving into the time of year when distributors are thinking about performance - the forthcoming Express Day is the big booster day of the year. The buying volume is not that significant but there are a lot if them - I suspect these are mainly distributors wanting a stake in their own company before the trading statement. My earlier comment was that TEP had fallen below their long-term trend line - they should not be below 300p, as instanced by Director buying at about that level.
Eric
Fred1new
- 09 Sep 2004 00:13
- 48 of 153
Projected PEg of .8 Projected Yield about 5.5 can't be bad. TA looks promising. Should help fill a few Xmas stockings.