Independent27 Jan 2009 11:30
AT Communications Group Our view: Hold Share price: 14.25p (+1.75p)
AT Communications (ATC) describes itself as an "ICT company focused on the delivery of IP-based solutions and services to small, medium, and large enterprises". Translation: It provides IT and telecoms systems for businesses, with the chief executive, Alex Tupman, calling it a "small BT". The most lucrative bit is servicing these contracts, and the group has been expanding further into the managed service business to help boost margins.
The shares have taken a bit of a hammering since the summer; disappointing for a company in a sector that tends to be relatively resilient to a downturn. The shares were up 14 per cent yesterday, however, after a trading update forecast turnover and earnings before interest, taxation, depreciation and amortisation would hit expectations for the full year. The market had feared ATC would miss its targets.
There was good news related to the company's worrying level of debt. The group announced it had paid down £4m since June, cutting borrowings to £18m. The group is also working on a disposal "which will go a long way to reducing debt levels".
ATC also revealed interest in one of its subsidiaries, and a new three-year contract with BT to provide sales services. The house broker, Cenkos, said that trading on 1.5 times this year's earnings prices the company as a distressed asset, but yesterday's announcement should help to kick-s