RE: Even if we do EPS of .70c next yearPorksniffer, most of your objections, failure to talk, small float and hence lack of liquidity, are addressed in the Financial Post article of March 31. Here are the extracts from the article which sets out your concerns and addresses them. It is followed by the entire Financial Post article.
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"Surprisingly, senior management, led by president and chief executive Thomas Skidmore, has taken a low-key approach in recent months despite invitations from investors to make presentations about the company's strategic plans. Some of Glentel's reluctance can now be attributed to trying to complete last week's acquisition of The Telephone Booth chain from Hartco Corp., which is estimated to be worth $10-million to $25-million in cash and stock.
To finance the deal, Glentel plans to do an equity offering. As a result, there will be a road show where investors will finally get an opportunity to get an in-depth sense of the company's plans."
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Mark Evans
1. Financial Post
Thursday, March 31, 2005
With all the excitement about the wireless industry's strong growth prospects, you would think Glentel Inc. would be more proactive in promoting its story as the country's largest wireless device and service retailer.
Surprisingly, senior management, led by president and chief executive Thomas Skidmore, has taken a low-key approach in recent months despite invitations from investors to make presentations about the company's strategic plans.
Some of Glentel's reluctance can now be attributed to trying to complete last week's acquisition of The Telephone Booth chain from Hartco Corp. , which is estimated to be worth $10-million to $25-million in cash and stock.
To finance the deal, Glentel plans to do an equity offering. As a result, there will be a road show where investors will finally get an opportunity to get an in-depth sense of the company's plans.
There should be lots of interest in Glentel, despite its small size with a market cap of just $60-million. The Burnaby, B.C.-based company is one of the few pure plays left in the Canadian wireless sector, following Rogers Communications Inc.'s purchase of Microcell Telecommunications Inc. and Rogers' privatization of Rogers Wireless Inc. This has not gone unnoticed by investors as Glentel shares more than doubled to a 52-week high of $8.49 in mid-February after touching a 52-low of $4 last August.
The stock has fallen back over the past month, closing yesterday down 6 cents to $6.64 in Toronto.
The recent decline happened after Glentel said last week fourth-quarter profits fell to $1.7-million, or 21 cents a share, from $2.3-million, or 29 cents, a year earlier. Revenue climbed 19% to $30.5-million from $25.7-million. The company said its results were hurt by a decision not to participate in one carrier's aggressive customer-switching program, which helped cause sales of cellular phones and other wireless devices to decline 6% from 2003.
Glentel's appeal lies in 86 retail stores in B.C., Alberta, Manitoba and Ontario that operate under the WirelessWave banner. The stores sell wireless devices, accessories and service plans from Rogers, Microcell/Fido and Bell. The Telephone Booth deal will add another 49 stores in Ontario, Quebec and Alberta, and boost Glentel's annual sales by about $40-million. Unlike Glentel, The Telephone Booth also sells consumer electronics, traditional telephones, and cable and telephony bundles.
"This transaction expands the overall Glentel retail footprint considerably, adds a new presence in Quebec, adds further economies of scale, and adds Telus Mobility as a new carrier partner for Glentel," Paradigm Capital analyst Barry Richards in a research note.
"Overall, we think the transaction could prove to be a very good one and it reinforces Glentel's position as the largest wireless independent retailer in Canada."
Mr. Richards, who owns Glentel shares and whose firm advised Glentel on its purchase of The Telephone Booth, increased his 12-month stock price target to $13.50 from $12 in response.