MTU - M2 Telecommunications Group

[kr1zh]

I could not find MTU thread so here is posting about MTU.

M2 Telecommunications Group Limited (MTU) is Australia’s largest network independent provider of fixed-line, mobile & data telecommunications services. MTU also provides fixedline & 3G mobile services in New Zealand.

M2’s retail business offers a suite of unique bundled valueadd telco services mainly for SME through a multi-brand strategy including Commander, People Telecom, Southern Cross Telco and M2 Telecom, each offering unique propositions through dedicated third party dealer channels.

“M2 Wholesale” supplies wholesale telco services to small and medium sized telco service providers & Internet Service Providers (ISP’s); Australia’s largest independent data wholesaler, Wholesale Communications Group, and CDR’s network services group, Unitel, were added in 2007 & 2008.

Recommendations:
http://m2.com.au/docs/investor/Lodge...u_20091112.pdf
http://m2.com.au/docs/investor/M2%20...ust%202009.pdf


reference:
http://m2.com.au/investor-centre/asx-announcements/

[ubtheboss]

This company has had some incredible growth in the last 2 years. It seems to be meeting a little bit of resistance at the current sp. Anyone else following this?

[moreld]

I find it incredible that despite M2's amazing performance as a company and a stock that it is getting so little interest here.
Here is my latest thinking on their 2011 1H. http://www.fusioninvesting.com/2011/...a-true-leader/

Net margin and ROE improving as they develop scale.
9 years of growth behind them and more to come.
Dividend up 40%.
Underlying profit up 37%.

[ValueSnatcher]

I find it incredible that despite M2's amazing performance as a company and a stock that it is getting so little interest here.
Here is my latest thinking on their 2011 1H. http://www.fusioninvesting.com/2011/...a-true-leader/

Net margin and ROE improving as they develop scale.
9 years of growth behind them and more to come.
Dividend up 40%.
Underlying profit up 37%.

Agree. Have been biding my time on this one and today I caught the falling knife.

[skc]

I find it incredible that despite M2's amazing performance as a company and a stock that it is getting so little interest here.
Here is my latest thinking on their 2011 1H. http://www.fusioninvesting.com/2011/...a-true-leader/

Net margin and ROE improving as they develop scale.
9 years of growth behind them and more to come.
Dividend up 40%.
Underlying profit up 37%.

It's a great company but not a cheap company. $400m market cap on $25m NPAT or PE~16 when the market is trading ~12.

The market has been marking down all the smaller ISP players - IIN, TPM and AMM are all down a fair bit from recent highs...

Can MTU keep up the growth in the post NBN world?

[ValueSnatcher]

It's a great company but not a cheap company. $400m market cap on $25m NPAT or PE~16 when the market is trading ~12.

The market has been marking down all the smaller ISP players - IIN, TPM and AMM are all down a fair bit from recent highs...

Can MTU keep up the growth in the post NBN world?

MTU focuses on SMB section 8/10 currently of which are taken care of by telstra, who focus on retail and high end corporate. So with MTU's target area not receiving much attention from telstra I believe MTU have scope to take some of this 80% share.
They have said that the NBN will not alter their model greatly...

[Tyler]

MTU focuses on SMB section 8/10 currently of which are taken care of by telstra, who focus on retail and high end corporate. So with MTU's target area not receiving much attention from telstra I believe MTU have scope to take some of this 80% share.
They have said that the NBN will not alter their model greatly...

do you ask the barber if you need a haircut?

[ValueSnatcher]

do you ask the barber if you need a haircut?

Relevance?

[robusta]

A month ago I was looking at MTU and thinking if only in fell below $3.00 I would buy some, well at $2.62 on Monday I could no longer resist.
A nice history of growth, good ROE and bright prospects. Once again this is a business that can increase revenue and NPAT with very little capital expenditure required.

[fanger]

A month ago I was looking at MTU and thinking if only in fell below $3.00 I would buy some, well at $2.62 on Monday I could no longer resist.
A nice history of growth, good ROE and bright prospects. Once again this is a business that can increase revenue and NPAT with very little capital expenditure required.

Nice trade robusta I wasn't so lucky and picked it up just before all the **** started at $3.20

[robusta]

Well just got home to see;
NPAT up 72%
EPS up 56%
Guidance for higher revenue and improved margins
Dividend up 80%
SP down 6.51%

Will have to read the report for any hidden nasties otherwise all I can think of is change of management caused the (minor) sell off.

[skc]

Well just got home to see;
NPAT up 72%
EPS up 56%
Guidance for higher revenue and improved margins
Dividend up 80%
SP down 6.51%

Will have to read the report for any hidden nasties otherwise all I can think of is change of management caused the (minor) sell off.

Read it again... guidance is for lower revenue and higher margin. The share price is marked down probably because of this strange looking guidance. Revenue down 6% on deliberate exit of low margin business, but somehow EBITDA margin will increase from current 11.3% to 15% at the same time. That is a very large jump in margin and difficult to see the levers for pulling out such a feat.

The management change isn't a big issue. It's an internal replacement with plenty of knowledge of the company plus the MD is moving to become exe director anyway.

MTU's current PE multiple is not that much different to her peers (IIN, AMM, TPM) and seems to be how the market value second tier telcos in the pre-NBN world.

[skc]

The management change isn't a big issue. It's an internal replacement with plenty of knowledge of the company plus the MD is moving to become exe director anyway.

Or may be it is according to the Australian.

http://www.theaustralian.com.au/busi...-1226124852044

M2 Telecommunications (MTU) $2.73: M2 chief executive and founder Vaughan Bowen now knows what investors thinks he's worth -- $23 million, the decline in M2's market cap after Bowen yesterday said he would step aside after 12 years in the chair, ceding to right-hand man Geoff Horth.

[robusta]

Read it again... guidance is for lower revenue and higher margin. The share price is marked down probably because of this strange looking guidance. Revenue down 6% on deliberate exit of low margin business, but somehow EBITDA margin will increase from current 11.3% to 15% at the same time. That is a very large jump in margin and difficult to see the levers for pulling out such a feat.

Not sure about that. The 72% earnings increase was on a revenue increase of only 5% from the PCP.

MTU seems to have the ability to wring more margin out of revenue IMO.

Or may be it is according to the Australian.

http://www.theaustralian.com.au/busi...-1226124852044

As a holder I look forward to seeing how the new bloke goes.

[robusta]

Normally not a fan of businesses growing by acquisitions but MTU seem to have got it right so far.

Here is a story on potentual directions.

http://www.theaustralian.com.au/aust...-1226178601911

[kr1zh]

Here I attached the short term chart and FY11 achievement and FY12 Forecast.

FY11 Financial Highlight.png
Guidance FY12.png

MTU.AX.png

[fanger]

mtu having a great run over the last month

[notting]

mtu having a great run over the last month

How about a great run over the last 10 years!!!!!! with pocket money added!

[CharlieShort]

All new to the forum and re entering the market after a long absence. I have been monitoring MTU for a while however am unable to ID any reason for the .12 share price drop on Wednesday. I would appreciate any informed views on possible reasons.

[notting]

Simple, It's a defensive(which is a bit of a joke when you consider how well it's done in all environments) and Wednesday was the most bullish day we have had in months!!
So, trend was, out of defense into risk.
MTU has also had a good run of late.
Some techies may say it's a good entry point as it has broken through recent resistence, However there is a little more resistence up there are 3.40 so do the risk reward number crunching if your a short term a.
Techies may not like the volume spike on the downturn as well as the low finish. Give it a few days I'd say.
But I'm no techie!