TeamTalk IPO

[Sauce]

This company seems to have a monopoly position in a niche market within the communucations industry.

Major risks include commercially competitive technological advances in the cellular / mobile radio market.

positives include monopoly market share with very high barriers to competitive entry (high startup costs etc).



Forsyth barr are have a valuation range of $2.29 - $2.64. Although they are the lead brokers for the issue.

Listing May 6th, issue price of $1.75 giving a market capitalisation of $35m.

Prospectus forecasts a divvy of 12.8pc per annum, (with the an interim dividend payout in May straight after listing).

According to Forsyth Barr the issue has been VERY popular. I managed to get a few - not as much as I would have liked, anyone have any interesting thoughts on this company?

[devito]

Only 8 million being sold. I tried to get some but FOSBAR didn't want a bar of me.

[devito]

Who are you? and why are you trying to talk up the stock. You must have got a few!:D

[Sauce]

Well actually, I did make an attempt to ensure my post was balanced by pointing out downside risk and the conflict of interest of the lead brokers valuation ;)

I certainly didnt get as many as I wanted. It pays to make the odd trade through all the main retail brokers to ensure access to these opportunities.

Treat others how you want them to treat you [8D][8D]:D

[The Doctor]

Pray tell when did the principals behind this coy ever do a shareholder any good?

[Lawso]

Who are the principals, Doctor, and what do you know about them? The only name I've heard is David Ware, chief executive. (Obviously I don't have a prospectus)

[glennj]

I've received a prospectus and they look ok but I can't get an allocation. Forsyth Barr, whom I don't usually deal with, are the lead manager and have dished out everything already. Tried two other brokers that I sometime buy through and they have none of their tiny quoata left . There is no public pool.
Looks like the stags will do ok on this one.

[Tinker]

I looked too and my perception was an honest float. With a bit more capital I think they will meet a demand from customers. I like the product and think there is room for a win/win in meeting some companies needs for low cost mobile comms.
And yes, sigh, Forsyth Barr would have none of me either.
Í think Teamtalk will have a successful float and wish them luck with their plans to provide an expanded service to companies that can use their products. I think there are many.
Discl: Wish I had some, and no I don't work for them!

[Binklebonk]

This company has a monopolistic position and a nice dividend yield but what makes me wary is the risk that technological advances will blow them out of the water. What have they got that is long term sustainable and where will they be in 10 years time? Are they just a cash cow to be milked for the next 5 years or so? Keen to hear answers from anyone who has read the prospectus.

[Sauce]

I have similar concerns regarding technological advances. Especially cellular technology. Telecom dumped their entire mobile radio network to these guys, I would guess that Telecom had decided it didn't fit within their plans for future technologies.

Vodaphone seem to be very activily (and effectively IMO) marketing their cellular business services and new technologies. Based on their success in capturing market share in the personal cellphone market, I would guess (from my very limited perspective) that they will be have some degree of success with their new pursuit against Telecoms market share of business customers.

Could all this business focus put the mobile radio market into vodafones crosshairs?

[Sauce]

FLLYR: TTK: Full Year to 30/06/2004 $2.622M ($3.091M) -15.2% DIV 9CPS

TRADING RESULT

Operating performance for the year exceeded expectations with a Net Surplus
for the year of $2.62 million, which is 26% ahead of the prospectus forecast.
This reflects stronger than anticipated demand for services in the second
half of the year, including TeamTalk's recently launched finance product,
together with continued tight control of costs. Over the year there was
continued modest growth in both subscriber numbers and revenue per
subscriber.

As signalled to the market with its profit upgrade announcement in May the
company has exceeded its IPO forecasts. The key comparatives for the Group
2004 results are:

IPO Forecast $000; Actual $000

Operating Revenue: 19,560;19,892
EBITDA: 7,974;8,606
Net surplus before tax: 3,534;4,372
Net surplus after tax: 2,086;2,622
Earnings per share (pre goodwill amortisation): 14.6;17.3
Dividends(cps): 15.0;16.5

Great result. Market must have been expecting more. What a fantastic divvie.

[Peitro]

Stumbled across this quiet little earner, seems to be a good dividend play.

They have maintained good sales growth and have seemed to keep ahead of the technology threat that could easily erode their business.

The recession has not hurt their sales, but will be interesting to see how their margins have held up when the financial s are released.

[Peitro]

Strong growth in mobile broadband this year. The next couple of years could be very interesting. No sell offers at present though

[Silverlight]

Current Depth for TTK

1000 2.26 2.3 7951
1789 2.25 2.35 8000
1000 2.25 2.38 2000
1000 2.25
3000 2.25
2000 2.25


From annual report in Sept NTA is 79.5 cps

Annual Dividend is 20 cents for the past 4 years, thats a pretty good div yield., and PE at full year was around 12.


TeamTalk Submits Govt Broadband Response
TeamTalk announced today that together with well known civil contractor Fulton Hogan it has submitted a response to the Government’s Ultra Fast Broadband initiative.

If successful this will see TeamTalk’s wholly owned subsidiary CityLink join forces with Fulton Hogan to build and operate a fibre optic based telecommunications network throughout the Wellington region.

TeamTalk’s Managing Director, David Ware is very excited by the proposition. “We’ve got 15 years experience in providing Wellingtonians with the fastest broadband at the lowest cost. With Government support it means that we will be able to get out there and finish the job. We will be able to provide service in the parts of the region we don’t currently serve” Ware said.

“What really gave us confidence to embark on this project was the overwhelming encouragement and support that we’ve received from Wellingtonians from all walks of life. Be they business people, Council representatives or regular householders they all want to see CityLink get out there and do the business. I think they all realise that the choice facing the Government is whether they create a vibrant competitive market for broadband, or whether they hand Telecom a monopoly for the next 50 years” Ware commented.




Any current holders have thoughts, or more indepth analysis about TTK's direction?

[Silverlight]

TeamTalk Half Year Profit Up 38%


TeamTalk announced a half year net surplus after tax of $1.98m up 38% on the same period last year. The increase is largely attributable to a substantial reduction in finance costs, including a reversal in the IFRS related revaluations of interest rate hedges. At an operating level revenues for the period were flat at $15.3m versus $15.5m for the same period last year as the group experienced extremely tight trading conditions. Both CityLink and TeamTalk’s mobile radio division experienced unprecedented churn as customers either downsized their businesses or, in some unfortunate instances, went out of business altogether.

What gives us heart for the future however, as it demonstrates the compelling proposition that our businesses offer, is that there was negligible churn to our competitors. This has seen us remain optimistic about the future meaning we have continued to invest for growth. In particular CityLink dedicated substantial resources to the Government’s UFB response and Araneo (our wireless broadband subsidiary) increased staff resources in order to meet the demand that is building in its sales pipeline. These two factors alone resulted in an increase in costs of over $0.3m.

Over the period the group continued to generate strong cashflows. This enabled the group to invest $3.8m in growth initiatives at the same time as reducing net debt by $1.3m and maintaining its historic dividend policy.

[waikare]

Can anybody comment as to why TTK in the last 4 weeks gone from $2.06 to close at $2.30 today, (thats about 11.5%) on the 31/5/11 it traded at $2.11?????

[tim23]

The yield is great thats why and history suggests sustainable

[waikare]

I see no shares were sold yesterday (10th) there is a bit of a gape between buyers ($2.15) and sellers ($2.30). Team Talk have consistently paid a interim and final dividend of $0.10 since Oct 2008. Even at $2.30 they have a gross dividend yield of nearly 12.5%, (NZX) not many others on the NZX are giving this sort of dividend yeild

I brought a small number at $2.11 about 3 weeks a go, and looking a getting some more.

[Catalyst]

For those looking for a high yielding stock with a bit of growth, TTK looks not too bad.

They've just posted a 25% increase in NPAT and said "over the next three years we expect to grow EBITDA by $0.5 million to $1 million pa, to continue to reduce our overall debt, and as a minimum to maintain our current dividend policy".

PE = $2.16 / ($4.8m NPAT / 23.0m shares) = 10.4x
EV/EBITDA = (23.0m shares x $2.16 + $18.1m net debt) / $12.5m EBITDA = 5.4x
Gross dividend yield = 20c / 216 / 72% = 12.9%

They're cum a 10c dividend payable in a months time. Not sure if there's anything in the 5m cross at $2.00 today?

[percy]

For those looking for a high yielding stock with a bit of growth, TTK looks not too bad.

They've just posted a 25% increase in NPAT and said "over the next three years we expect to grow EBITDA by $0.5 million to $1 million pa, to continue to reduce our overall debt, and as a minimum to maintain our current dividend policy".

PE = $2.16 / ($4.8m NPAT / 23.0m shares) = 10.4x
EV/EBITDA = (23.0m shares x $2.16 + $18.1m net debt) / $12.5m EBITDA = 5.4x
Gross dividend yield = 20c / 216 / 72% = 12.9%

They're cum a 10c dividend payable in a months time. Not sure if there's anything in the 5m cross at $2.00 today?

Major shareholder selling down.Craigs placed the shares last night with their clients at $2.00 PER SHARE.

[Catalyst]

Ok, thanks Percy. That may put some short-term pressure on the share price but could create some opportunities over the next couple of weeks or so.

[percy]

Ok, thanks Percy. That may put some short-term pressure on the share price but could create some opportunities over the next month or so.

I had team talk at issue,have since sold.[and missed the divies] It was my understanding that Active Equities would at sometime sell down. So as you point out I would expect it would only be short term pressure on the SP and may create opportunities.Spent my little bit of spare cash yesterday afternoon buying more CCC after getting excited by chairman's comments, so missed out on Team Talk placement.

[percy]

Interesting announcement,here on sharetrader.
Go to forum, then Unlisted,then Active equities investment.
Sell down of TTP ,buy back of AEIT,distribution of TTP shares to AEIT shareholders.

[bung5]

Anyone holding this? solid returns in a growing industry I'm in

[Lizard]

I had TTK at issue too and also sold pre-GFC around $2.70 I think. Picked a few up again recently, but yet to decide if I will add more. The yield is okay, but debt is higher than I like.