Your points are noted, but he needs to say that, doesn't he. However, Colin Marland is not the new CEO. Ryan O'Hare, is.
But, what happened to the forecasts specified last year in PTL's deals with MUL and with SWT, and in B&T?
Towards MUL, PTL was quoted in MUL's ASX-R 250803 as saying that PTL's revenues were "heading towards $100 million" (with 16,000 customers). O'Hare was quoted in the ASX-R so presumably PTL pre-approved the Release before it was issued.
As for SWT, the ASX-R 290703 attributed PTL with "annualised revenue of $70 million" and "over 12,000 customers". This was the announcement where PTL and SWT first joined forces, and where Marland joined SWT's Board.
Annualised revenue of $70M means that PTL should have posted a much higher revenue figure for 1H04 than it did, especially as the July to December time period is generally the higher grossing period from a telecommunications revenue perspective.
To suggest otherwise means that in 2H04, PTL mst deliver $53.5M in revenue, which is double its 1H04 revenue of $26.5M.
Another way of saying this is that PTL must make 2/3's of its July /August 2003 forecast during 2H03, when it was only able to do 1/3 of this amount during 1H04, and this was at a time when the July /August forecasts were being made.
Then on 4 September 2003, there was the B&T (Rosemary Ryan) article which stated that PTL was targetting "the small-to-medium sized business niche, (and was) aiming to ramp up its growth over the next 6 months and (was) targeting revenues of about $150M by the 2004-2005 financial year". Again, at the halfway mark of the year, PTL only had another $123.5M to go (or 80% of the stated amount) to get to this estimate.
Since 2003, PTL also seems to have lost (not gained) customers, as, at the time of the SWT announcement, PTL was credited with having 12,000 customers, which increased to 16,000 customers by the time of the MUL announcement, one month later, but which has now fallen to 10,000 customers.
Within the next few weeks, Vodafone will be launching an unprecedented tariff pricing campaign which is aimed at making local mobile calls as cheap as (or cheaper than) fixed line local calls. And that's just the beginning.
Hutchison with "3" is now attracting high usage customers and is winning corporate business, especially from Optus, but to a lesser extent, from Telstra.
All fixed line (and indeed) mobile calls are either falling, or are in the process of falling, in price, with margins compressing even further.
To, therefore, get to Colin's fine-tuned forecast of $100-110M will now be a very big ask, unless of course the SWT offerings are going to do this for them. But then, if this were to be the case, then the dilution factor should be much less than a 35/65 post-merger split.
SWT cuurently lacks scale, but PTL lacks substance, stability and assets.
The 2 will benefit from merging their operations together, but the dilution factor to existing SWT shareholders is excessive. On this, PTL has had the upper hand.
Looking at the ASX Release of 12 March 2004 indicates that PTL's revenues were $26.5M in 1H04 and that it has 10,000+ business customers (more on this in a moment).
However, PTL's 31/12/03 Balance Sheet showed the following (by extrapolation):
---------------------- ASSETS ---------------------- CURRENT ASSETS ---------------------- Cash = $2.5M Receivables = $7.3M Other = $1.0M ---------------------- TOTAL (CURRENT ASSETS) = $10.8M ---------------------- NON-CURRENT ASSETS ---------------------- Plant & Equipment = $0.1M Intangibles = $34.6M Term Deposits = $1.5M Other = $0.3M ---------------------- TOTAL (NON-CURRENT ASSETS) = $36.5M ---------------------- TOTAL ASSETS = $47.3M ----------------------
---------------------- LIABILITIES ---------------------- CURRENT LIABILITIES ---------------------- Payables = $10.4M Provisions = $0.4M ---------------------- TOTAL (CURRENT LIABILITIES) = $10.8M ---------------------- NON-CURRENT LIABILITIES ---------------------- Other (not explained) = $1.6M ---------------------- TOTAL (NON-CURRENT LIABILITIES) = $1.6M ---------------------- TOTAL LIABILITIES = $12.4M ---------------------- EQUITY = ~$35.0M ----------------------
Stripping out the Intangibles, however, leaves a net asset position (hence, net equity position) of $400,000.
It's not, therefore, that the PTL business is bad, as much as it is constrained by shareholder limitations, limited access to the capital markets (ie: as an unlisted company), caught by compressed (and reducing) margins, subject to increased competition, with limited assets, and struggling to lock in an effective and sustainable forecast.
