Not sure this was entered correctly in weekend thread..
Entry for STT List - FA
Anittel Group Ltd AYG:ASX Software & Services Sector Australia
Anittel provides Cloud, Internet, Telecommunication and IT services for organisation across regional and metropolitan Australia. The company is expanding through organic growth and targeted acquisitions to offer scale, geographic reach and expertise for existing and prospective customers
MC = $12.8m Shares Outstanding = 2.6bn Current SP = 0.006 Debt = Approx. $10m
Company is in the MSPmentor Top 501 - Number 21 Launched in February 2013, the MSPmentor 501 is a global ranking of the world's top 501 managed services providers.
From MSP website..
21. Anittel Pty Ltd
Another repeat performer on the MSPmentor 501 list, Anittel has leveraged organic growth and M&A to emerge as one of Australia's top MSPs.
Let me first address the obvious concerns..
High Number of shares
~ 880m of 2.6b are owned by company director Peter Kazacos 3 major holders own ~ 55% of issued shares Top 20 hold 1.912 b or 76% of issued capital
IMO this leaves an approx free float of 900 m shares as a maximum
Debt
All debt is owed to Director Peter Kazacos .. approx $10m If you ever needed an incentive to succeed this is it..
The companies recent announcement that it has sold part of it's business for $6.5m to BGL will strengthen the balance sheet and be used to pay down the majority of this debt..
From ann..
Anittel Group Limited (ASX: ‘AYG’- ‘Anittel’ or ‘the Company’), is pleased to announce that it has entered into agreement with listed carrier BigAir Group Limited(ASX: ‘BGL’) for the sale of its general hosting and network infrastructure and carrier business for cash consideration of $6.5 million. Subject to several conditions precedent (refer below) the sale agreement will be completed effective 31 January, 2014.
The company has never had an issue gaining/increasing revenue.. Revenue (m) 2009 5,308 2010 21,500 2011 59,573 2012 56,596 2013 50,947
Their problem has always been achieving any meaningful profit from these enormous revenue figures. In July 2013 they engaged PWC to provide a strategic overview aimed at increasing profit and shareholder value.
From ann.. 'This transaction follows on from the strategic review of Anittel’s business carried out by PWC as advised in the Company’s most recent results announcement.'
The company has secured numerous government and big business contracts in the IT and telecommunications space.
Most notable contracts announced..
25 Nov 2013 - Anittel Secures $3.5million of Contracts in Victoria 16 Sep 2013 - Anittel Wins Tasmanian Government Infrastructure Hosting Contract 21 Aug 2013 - Government commits $8.9 million in Federal Funding for Townsville Tropical Knowledge Innovation Centre
The transaction with BGL will add to AYG's already impressive distribution network..
Additionally BigAir and Anittel will enter into arrangements around the distribution of Anittel’s HCS offerings via the BigAir distribution network. This will, in conjunction with Anittel’s broad reach, provide the potential for rapid uptake of this in-demand technology.
'Anittel will become a reseller for BigAir Group following the Australian fixed wireless company’s purchase of Anittel’s hosting and infrastructure business.'
'The two companies will also enter into an arrangement around the distribution of Anittel’s hosting and collaboration service offerings via the BigAir distribution network.'
WIth a MC of $12.8m and track revenue of generating very significant revenue this stock (IMO) is one of the clearest value prepositions on the ASX.. AYG is a tech stock yet to benefit from the huge improvement in sentiment toward this sector. IMHO AYG will be a standout performer in the first half of 2014..
ST Price catalysts :
- Finalisation of transaction with BGL (by 31 Jan) - including announcement of detailed terms with regard to distribution agreement. - Increases in revenue/profit resulting from PWC strategic review (Quarterly due by end Jan) - Potential for further significant transaction announcements resulting from PWC review - Potential further large contract announcements
