re: financials for tex5q> Hi Bwana
Maybe my last few posts have brought in some attention to the stock, because the bids are building this morning ?
The funny thing is I was having a hard time dropping 550k onto the market at 20c it took me a week of drip feeding........lol.
I have know SNN to defend their share price at levels of 16c until interest grew in the stock, so maybe this little grip of mine has shaken them up ;-)
Regardless, I've made my decision but like yourself I made trade them from time to time.
Tex.
(((((The new Executive team took over in December 2002 and has been in a turnaround reconstruction process since. The company expects to begin talking to brokers to seek to broaden its footprint in the marketplace around February next year.)))))
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FEATURE
Week’s Special
RECONSTRUCTED MAXIS WELL WORTH CONSIDERING
By Jenny Prabhu and Gerald Stanley
Maxis Corporation (trading deferred settlement until the 30th October), and relaunched as Sonnet Corporation on Thursday, is an IT service provider with two profitable businesses and a now stable register of three groups who together hold some 60 pct of the company and believe in its future.
Maxis has acquired Senteq Information Systems Pty Ltd that has operated in Sydney and Melbourne since 1987, formerly run by John Fisk, a well regarded IT entrepreneur. (briefly a wholly owned subsidiary of National Telecoms Group).
Maxis’ other core business is Managed Networks , a profitable business acquired by Maxis some two years ago.
On October 14 Maxis announced EBITDA for the nine months to Sep 30 2003 had reached $2.63 million, well on track to meet the forecast provided in July for a calendar year EBITDA range between $2.5/3.5 million.
Maxis is near the end of its process of offloading non operating and unprofitable subsidiaries acquired under previous management – from oil and gas interests to IT - including the recent sale of Heartland for a book gain of around $600,000 to a management buyout team.
While there are components of Maxis core businesses – Senteq and Managed Networks - that resemble Volante Group and Data#3, - as well as SMS Management & Technologies and KAZ - Maxis/Sonnet sees itself as a co-sourcing company, managing desk top services for large corporate and government departments. The product sales business plays a greatly reduced role, as evidenced by its significantly lower topline revenue numbers.
Meanwhile, although the outsourcing sector is fairly crowded and very competitive – and rationalisation is expected - as Hostworks chairman David Archer said at that company’s AGM on Thursday 16, “The main drivers for growth are coming from “the increasing trend of governments and enterprises to selectively source their IT requirements and the generally increased ubiquity of the Internet”.
Maxis has 7 or 8 major clients including, from the Independent Expert’s Report dated August 9, Qantas, McDonalds, EDS, Lend Lease and TAB. Three other major clients include a gas utility, merchant bank and its relationship with the Telstra IT services company.
Maxis is also subcontracted by service provider CSC to manage a Wide Area Network for a NSW government department.
Rebranded, reconstructed and now in one building
Maxis has now consolidated its businesses in one building, the shares are being consolidated on a 1 for 5 basis, to be completed by October 30, and on Thursday this week the company launched its new brand, Sonnet Corporation, expected to have the stock code SNN. The branding campaign is planned to be a four week program.
Sonnet Corporation will have two divisions, Sonnet Managed Services and Sonnet Enterprise Services, embracing Senteq and Maxis’ existing profitable business, Managed Networks.
The stock is held between three core groups in roughly equal 20 pct stakes – one group is a handful of high net worth individuals who took place in the recapitalisation in August 2002, , another is Marcel Dufour and family members and the third is John Beville, a Sydney based property developer in BRW’s Rich List and a canny investor in micro caps (took an early stake in Tribeca).
The new Executive team took over in December 2002 and has been in a turnaround reconstruction process since. The company expects to begin talking to brokers to seek to broaden its footprint in the marketplace around February next year.
MAXIS CORPORATION/SONNET CORP – A SNAPSHOT
Sonnet Corporation will be the fourth name change for a company that began life as Quicksilver in 1989. Quicksilver was a diamond explorer under Alan Burns, later changing direction to oil and gas. In 1995 Quicksilver became Capital Energy, still focussed on oil and gas with Vaz Hovanessian as the Managing Director.
Capital Energy became Maxis Corporation Ltd on Feb 1, 2000, changing direction to an IT service provider with the purchase of Australian Business Technologies for $70 million. ABT was placed into receivership in 2001.
In May last year a HOA with Pahth Telecommunications led to the acquisition of shares in Maxis by Pahth and others. This process included the issue of 100 million shares at 2 cents underwritten by ABN Amro Morgans.
The new board and management took control of Maxis late last year with the appointment of Robin Devries as non exec chairman (previously Group Treasurer of Consolidated Press Holdings, Group Treasurer of Bond Corp and Treasurer of each of TNT and Ansett Transport Ltd).
The businesses
1/ Managed Networks:
Managed Networks, the existing business, provides System Integration Services, design and implementation and project management.
Its Managed Services team provides remote monitoring, remote management and reporting services.
In January this year Maxis Corporation announced CSC renewed its major contract with the company's subsidiary Managed Networks. This extension will be for a further three years and the financial terms will be substantially the same as those applying in prior years. As this contract was the primary income source for the group, the board sees this renewal as providing a sound footing for business for the coming calendar year (although the new contract includes a clause that allows the client to terminate at any time with three months notice).
Maxis has a sub contract from service supplier CSC that provides and manages the services for a NSW Government Department.
Maxis built and now operates a NSW Government Department’s wide area network (WAN).
2/Senteq Information Systems Pty Ltd
In July Maxis Corporation Ltd announced it had finalised arrangements for the acquisition of Senteq Information Systems Pty Ltd from National Telecoms Group. Under the original agreement with the vendor signed in December 2002. Maxis paid a total of $1.50 million.
Senteq provides outsourced IT and telecommunications services to businesses, rendered on a turnkey basis. This means that Senteq designs the client’s network, procures the hardware, configures the network and installs end user software and applications. Senteq then manages the network on an ongoing basis.
Senteq’s major operating divisions are Systems Integration Services, Support Services, Managed Services and Procurement.
Richard Hill & Associates in the Independent Expert’s Report dated August 9 this year says Senteq’s major clients include Qantas, McDonalds, EDS, Lend Lease and TAB. A contract with a large energy utility commenced in Jan 2003 and another large financial services company commenced in July 2003, providing $1.1 million over 3 years. Other major contracts have been achieved.
MAXIS FINANCIALS
Last Traded price 22c (DA)
Shares on issue 72.1 mln shares (after consolidation)
Market Cap $15.9m
Year ended June 30, Values in Millions$
INCOME 2003 2002
Op Revenue 20.2 9.8
Net profit 0.9 (2.9)
EPS (Cents) 0.26 (1.1)
PE Ratio (times) 17.3
BALANCE SHEET 2003 2002
Current Assets 6.6 2.5
Non Current Assets.. 1.0 1.6
Current Liabilities 3.1 2.8
Non Current Liabilities 0.1 -
Net Assets & Shareholders' Funds 4.4 1.3
Intangibles 0.6 0.6
Net Tangible Assets 3.8 0.7
Gearing (Net of Cash) % Nil nil
NTA per share (cents) 1.04 0.64
Shares Issued (Millions) 360.4 105.9
Cash Flows: 2003 2002
Cash on hand (at open) 1.3 1.0
Operating Activities 1.1 2.8
Investing (1.2) -
Financing Activities 1.8 (2.5)
Cash on hand at Year end 3.0 1.3
Cash on hand at September 30, 2003: $3.7m
Maxis Corporation Ltd announced in June this year that if both the Heartland and Senteq transactions are completed (which have since occurred), it expects EBITDA for the calendar year will be between $2.5 mln and $3.5 mln.
For the six months to Dec 31 2002 the group reported an EBITDA loss of $1.59 mln adversely affected by $2.98 mln in one off restructuring costs.
Directors and Executives:
Robin Devries, chairman (previously Group Treasurer of Consolidated Press Holdings, Group Treasurer of Bond Corp and Treasurer of each of TNT and Ansett Transport Ltd)
Eugene Kopp, non exec director (currently Director of Strategic Investments (Australia) Pty. Ltd.
Geoffrey Garside non exec director and company secretary.
Marcel Dufour, a major shareholder, is currently CEO of the Senteq subsidiary and is likely to become Group CEO.
Major shareholders:
Three high net worth individuals (through ABN Amro Morgans) with 17 pct
John Beville (a Sydney property developer) with 18.5 pct
Marcel Dufour and family members 19.7 pct
ends
SNN
sonnet corporation limited
