One of my favourite stocks, FTR is finally moving up again, albeit on low volume. This company has great backing and management and its bank is now growing daily.
I have a sizable position in this stock and am a holder for long term. As its two main businesses are now cash flow positive. I think they deserve some airplay :)
I would describe FTR as a technology incubator...or mezzanine financer...to potential technology related products. It’s had some wins and losses but overall they are coming out in front as their main businesses mature.
Their main businesses are 1) FTR Pty Ltd (100% owned by FTR Holdings Limited, ASX code FTR) is a court recording business allowing court transcripts to be recorded and transcripted immediately allowing huge efficiencies to the court systems. This software based digital audio recording solution is the most popular courtroom recording system in the world. FTR products are now installed in more than 4,000 sites in 15 countries. It made a profit of $1.8 million this year compared to a $2.8 million loss last year.
2) Webcentral is arguably Australia's largest web hosting company. FTR own 49% and posted a profit of $440k this year after heavily investing in infrastructure, staff and product development. This is up from a $2.4mill Loss last year. WebCentral has $4mill in cash and growing now, recently paid FTR a fully franked dividend of $375k.
3) INETSTORE (48% owned) iNETstore Corporation Pty Ltd ("iNETstore") is an e-commerce software developer. It develops a range of products that enable the rapid deployment of database driven online stores and catalogues. iNETstore has partnered with some of Australia's leading Internet service providers and web hosting companies, including OzEmail, UUNet and WebCentral. Recording an operating loss of approximately $123k on sales of $453k FTR have written off the entire value of this investment to clean their balance sheet but there is potential of future growth here.
4) A small holding in US company QSI Payment solutions (1%), operates in the field of secure Internet-based payment solutions. Again this has been totally written off to clean FTR's balance sheet but has future potential.
5) Chaos Music which is a listed ASX company (code CHS) that has had a tough life, most of the holding has been sold off but they still hold 2.7% (1.14mill shares) and are valued at June30th closing price in FTR books...which is not very much $.
So in short the 2001/2002 was a time for FTR to clear the decks built up from the tech boom and focus on its main businesses. We should see no more write downs that have affected FTR earnings over the last 2 years.
You will also notice Malcom Turnbull buying up shares over the last 6 months and now holds 26% of shares on issue. Malcolm made a squillion from OzeMail Internet sale to Worldcom in 1999 to the order of $60mill personally after tipping in $500k a few years before.
No 2 on the top 20 shareholders is Arton No 1 PL with 15% who I think you will find is Shaun Howard, the founder of OzEmail and made a small fortune of $160mill from the OzEmail sale to Worldcom.
No 3 I think you will find Golden Words P/L with 12% whom I believe is Trevor Kennedy, also made $60 mill from Ozemail for his $500k investment over a few years.
Even our old favourite Nefco Nominess is still in there with 3.5% share holding.
With the top 3 shareholders owning over 50% of shares on issue and their financial backing being quite substantial, I see a bright future for FTR with these already successful entrepreneurs driving and funding this business.
FTR Holdings stated $3.8mill cash at June 30th 2002, up from $1.5mill in June 2001. They have added another 1.2mill over the last few months as stated at the AGM and cash in bank is now $5mill.
With only 35mill shares on issue their $5mill equates to about 14c a share. Share price is low 40’s at present after coming up from the 20’s during the year. Current cash is growing approx 3c a quarter at latest rates. Add to this the Webcentral business and cash, then the successful FTR P/L business and then its other interests and strong management, I feel current price is very fair.
Its main problem is it is traded very thinly due to the small amount of free stock as well as it is seen as a telecommunications/tech company….which the market continues to punish.
Appreciate any other fundimental views for or against this stock or any chartists technicals views…
