Forum Archive Index - February 2001

[Derek <dkw@paradise.net.nz>]

Matthew,

As to why the the recent slashing of TMN shareprice by over 50%.

As far as I can tell the market has over-reacted to their 1/2 year loss
of $3.7 m.

This comes in an atmosphere where many small (many first-time) investors
have had their fingers burned by falling IT shares. Going by the large 
no of small parcels of TMN trading it seems that small investors are doing 
the selling.

They seemed to have ignored the fact that TMN has not changed fundamentally.
The loss was due to the aggressive write-off of goodwill.
IMHO, Underneath this TMN is still a profitable business with good growth
prospects.

I consider myself lucky (for a change) since only last week I was 
considering buying TMN at $2.20. This week I picked some up at 90c.

See the news on your broking service for all the half year details
(I've pasted their press release below).

Derek


TELEMEDIA NETWORKS INTERNATIONAL LIMITED      2001-02-13  ASX-SIGNAL-GHOMEX
- Melbourne+++++++++++++++++++++++++Telemedia Networks International
Limited (ASX:TMN) has announcedrevenues of $28,727 million for the half
year ending 31 December2000, an increase of 412% on the same period in the
previous year.Over the last three consecutive half-year periods, Telemedia
hasgenerated revenues of $5.6 milllion, $18.4 million and $28.7
million,demonstrating the continuing confidence in this sector of
thetelecommunications industry as customers seek differentiation
throughvalue-adding products.EBITDA for the half year was $3.766 million,
an increase of 209% on$1.218 million in the previous corresponding period.
EBITDA marginsremain comparable with Telemedia's longer established
industry peers.Net profit after tax and prior to goodwill amortisation was
$1.231million compared to $0.636 million in the previous
correspondingperiod. This 94% increase has been diluted primarily by the
cost offunding the company's rapid growth.Amortisation of goodwill arising
from the purchase of two USbusinesses in May 2000 amounted to $4.963
million for the half year.This gave rise to a net loss after tax and
amortisation of $3.732million, compared to a net profit after tax of $0.636
million in theprevious corresponding period when there was no amortisation
charge.Goodwill will be fully amortised by June 2005.Mr Chris Jones, chief
executive of Telemedia, said, "This is a verysolid result for Telemedia,
with the revenue figure in particulardemonstrating the underlying growth
potential of our industry sectorand our company."Our two US acquisitions
have contributed to the growth of thebusiness in this half and are poised
to contribute even more stronglythrough the introduction of Telemedia
products into their sizeablecustomer bases. Full integration of both
acquisitions is almostcomplete, and the resulting cost reductions and
efficiencies areexpected contribute profitability in the next reporting
period."HIGHLIGHTSOther highlights of the result include:* Research &
development expenditure reached a new high with more than$3 million
invested.  Important projects completed during the periodinclude:* Unified
Messaging Systems - Telemedia continued the development ofits unified and
multimedia messaging solutions, launching UnicallMessaging.  This advanced
messaging solution enables service providersto offer their customers
unified email, voicemail, fax and SMSmessages from one integrated inbox
that can be accessed from theInternet or fixed and mobile phones.*
Intelligent Network Systems - Telemedia extended its switchingsolutions
range to offer IN-enabled products that can handle millionsof subscribers.
Telemedia has also invested in the port of its currenswitching products to
CISCO, allowing the company to provide solutionsbased on either CISCO or
Lucent architecture.* Voice Response Unit - Telemedia further developed its
voice responsesystems to enable all of its products to support a large
number ofvoice prompts. The Company also continued development on its
voicerecognition products for voice activated dialing and voice
navigation.* Important new contracts have been won in new markets,
Telemedia'srecent $18 million-plus deal with leading Japanese mobile
telco,TU-KA, follows on from other smaller deals in the region
andrepresents the largest sale for the company since listing on the
ASX.MIGRATION TO US-INCORPORATED COMPANYAs indicated in Telemedia's 2000
Annual Report, and subsequently atthe Annual General meeting, the Board has
been considering variousoptions for the next stage of the Company's growth
and to furtherenhance shareholder value.  A decision has now been taken to
migrateto a US-incorporated company.  This decision has been made to
ensurethat business opportunities available in North America are
exploitedto the fullest.  Documentation is currently being prepared to
achievethis migration, and shareholders will be involved in
thedecision-making process.Under this arrangement, Telemedia's share will
continue to be listedon the ASX."Despite a softening in investor and
creditor sentiment towardsmainstream telecommunications companies and the
Internet sector,Telemedia continues to benefit from opportunities treated
by thedemand by telcos for enhanced services as they compete to gain
andretain customers," Mr Jones said.




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