Forum Archive Index - May 2000

[kevin.young@gfmb.co.nz]

Francis Salvesen
17/04/2000 15:59

Sent by:  Francis Salvesen

Subject:  Telemedia

The set back in the Nasdaq index has knocked technology shares around the world
for six. Telemedia is no exception. The important criteria for stock selection
are
1.  Experienced proven management;
2.  Solid cash flow
3.  Growing earnings and profits
4.  A market niche with few competitors, high barriers to entry, and high
margins, in a growing market.

Telemedia has an exceptionally strong Management Board. Chairman Rod Olsen has
had 22 years with Cable and Wireless and is currently chairman of Cable and
Wireless Optus and a director of Cable and Wireless HKT; Chris Jones, Moses
Armstrong and Peter Meredith all have in excess of ten years management
experience in a number of multinational companies, including Telecom. Colin
Marland is an expert in digital telecommunications systems, co-founder of
CorpTel (now AAPT), director of Davnet  and a telecommunications consultant.
Evidence of theDirectors ability has been proven, in establishing a quality
blue-chip client list, securing large take-overs (of companies in the same
industry, with good synergy) and securing strategic alliances.Major customers
include Clear, Telstra, Telecom, Freedom, AAPT, Ericsson, Vodafone, CAT, Net
Tel, AIS, Intradata Gold prepaid Mobile and WorldxChange Communications , France
Telecom, Siemens, Telecom Italia, Telia Sweden, Datakom Austria and Hong Kong
Telecom.  Two large take-overs have been agreed this year: Telemedia announced
that it was aquiring Phoenox Technologies Inc, a US based manufacturer of
enhanced billing systems that allows Telemedia to build integrated systems and
switches based on Excel, Microsoft NT and Unix-based software. The cost amounts
to Au$34.4m.Telemedia announced a further acquisition, spanning the US and
Europe, of Donia Telecom for a AU$ 18.1m. The latest acquisition proovides
Telemedia with access to Donia



?s extensive global client base, including leading
US and European Telecommunications companies. Bearing in mind that the company
only raised Au$15m, take-overs of Au$52.5m within a year are remarkable.
The Company has also secured Strategic Alliances with DO CO MO, Japan's largest
mobile telephone supplier, and, within the last few days, with Sun Microsystems.
Telemedia has solid cash flow resulting from licencing its pre-paid mobile
telephone technology and from vast telemedia switching devices, which allow
voice, digital writing and pictures to be routed through to mobile telephones.
Earnings have grown for around $1m a year ago, to Au$5.6 in the first six months
and are expected to grow to Au$22 in the first year of listing. Next year's
growth is likely to be even more dramatic, bearing in mind the acquisitions and
the strategic alliances. While much of the profit is used to expand thebusiness,
the Company still announced profits of Au$0.6 in the first six months of
listing.
Telemedia has established a quality brand, in a niche that demands technological
superiority. Customers are prepared to pay more, because they receive solutions
to their telecommunications needs, complete with technical assistance. The
market for Mobile telephones, and the switching equipment required, is growing
in leaps and bounds, and those who havee mobile phones are quite likely to
switch to the more advanced date/email mobiles once these become widely
available. Following Completion of the recent acquisitions, Telemedia will have
a global installed base of enhanced service solutions with more than 130
installations across 69 telecom service providers in 33 countries. This gives
the company worldwide 24 hour live support infrastructure stretching across six
continents.
You have seen Telemedia move up from this level to Au$10 and wished you had the
hindsight to have bought earlier, now is your chance. Buy at 475c
Francis Salvesen - INVESTMENT ADVISOR
BSC (Econ), MBA
Associate Member of the London Stock Exchange


=============================================================
The information contained in this message and any annexures
is confidential and intended only for the named recipient(s).
If you have received this message in error, you are
prohibited from reading, copying, distributing and using the
information.

If you have received this message in error, please contact
the sender immediately by return email and destroy the
original message.
=============================================================


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
To remove yourself from this list, please us the form at
http://www.sharechat.co.nz/forum.html.