Top member reports
No meetings
Consensus community valuation
The consensus valuation is for members only and has been removed from this chart. Click for membership options.
Contributing Members
Content is delayed by one month. Upgrade your membership to unlock all content. Click for membership options.
#Management
Added 2 months ago

Noticed the CEO bought a chunk of shares.

72d0c52d82bccea4155c9356900725d63c391a.png

Has been free cashflow positive but is saddled with interest payments from debt that is making the business losses

Something to watch but with the CEO in the game for 6 years, this one is not really a turnaround stock. I guess this is one stock which is falling behind in the tech space although more concentrated in the comms sector which looks like lower margin.

Read More
#Research Report
stale
Added 10 months ago

Please digest with a grain of salt (CCG has paid for this coverage), yet some interesting perspectives here nonetheless.

f018a447907c2be3a294874c8b0814fefcac6b.png

Read More
#FY23 Results
stale
Added 11 months ago

Underlying EBITDA guidance remains at $6.5m to $7m. Market cap of ~$30m.

A strategic review is also underway, which may unlock value (i.e. spin-off of a business unit).

Happy to continue holding here, given the ongoing execution and pending catalysts.

7b7b9206c172bbdd7543a1ab9385788f7580be.png

2fd17a3bb12cb3a5b2114742ee97d2d7c57af1.png

Read More
Valuation of $0.110
stale
Added one year ago

Comms Group announced a strategic review recently. They are guiding to $7m of EBITDA for FY24e. Assuming a 7x sale multiple (12.5% discount to recent peer transactions to be conservative), that equates to a $49m enterprise value. Deduct $8m of debt outstanding and that is a market cap of $41m, or a share price of ~11c vs. 7.0c today (57% upside).

Read More
#NED Buying
stale
Added 2 years ago

911,273 shares were purchased at 7.5c by Comms Group (CCG) Non-Executive Director (NED) Ryan O'Hare (~$68,000), which brings his total holding to 4,679,273 ordinary shares plus 20,729,650 ordinary shares held in escrow until 29 January 2022 and 20,729,650 ordinary shares held in escrow until 29 July 2022. His total holding (46,138,573 units) is worth around $3,875,640 at current prices (8.4c). Not an enormous buy relative to his total holding, but a sizeable buy in absolute terms nonetheless. One aspect I like about this company is that both management and board have a significant amount of skin in the game.

Ryan’s telecoms career began in 1993 when co-founding telecommunications service provider corpTEL Communications. corpTEL rapidly became one of the largest privately-owned B2B telecom groups in Australia. Ryan was its major shareholder, Chief Executive & Chairman until its sale to AAPT (TPG) in 1998. People Telecom Limited was also co-founded by Ryan in 2000. Again, as a B2B telecoms provider, however, in this instance it owned its own data (and fibre) network and was a significant broadband network operator while an ASX listed entity. Today it’s part of the Vocus Group. In 2007 Ryan founded Next Telecom in Australia that is now recently part of Comms Group Limited. In 2014, Ryan founded Next Business Energy, one of Australia’s premium B2B energy groups that won the fasted growing company in Australia in 2018 recording revenues over $100 million.

Read More
#CEO Buying
stale
Added 2 years ago

CCG CEO, Peter McGrath, has bought 1.3% of the company on the open market as of Monday (9th May 2022) ($400k AUD) which is >1.3x his annual base salary. A very bullish signal. With this purchase, he now becomes a substantial holder (owns >5% of the company now). At 8.6c, CCG is on an FY23e EV / EBITDA multiple of 4.8x.


Read More
#Follow-up: Reduced Client Spen
stale
Added 2 years ago

Following on from the previous straw it is pleasing to see these comments, which clarify the situation somewhat.

"Right at the start of the second half, we did see reduced spending on domestic telephony services by a key global wholesale client, one of our larger global wholesale clients. They are an overseas company but they run a major (domestic) consumer services business in the food services area. They have not churned and moved to someone else, so they are still with us, they have just re-engineering their internal processes and as a result, they are not spending on some of the inbound services, to the level that they were before. In fact, the levels are reduced significantly, and that has resulted in a loss of revenue and profit within the period, which is what we have mentioned in our release." — Peter McGrath, Presentation Section

"We would see the announcement today as being a temporary thing, we expect to recover the revenue we have lost from this customer very quickly. We clearly want to work hard to build the share price and the equity value in the business. With a key focus on the organic opportunities, it is up to us now to bring those across the line and demonstrate to the market that we can grow the business organically and I'm very confident on that as it stands today." — Peter McGrath, Q&A Section

I'm changing my sentiment back to a buy (from hold) in light of this.

Source: https://commsgroup.limited/news/182467-comms-group-ceo-md-presents-at-nwr-communications-virtual-conference

Read More
#EBITDA Downgrade (3.05.22)
stale
Added 2 years ago

Unfortunate developments today as released to the ASX.

aa228cbda515e267c62b67680fb52ab22241ed.png

21efef15556a94484c6d155f68b8fa1c439899.png

If one takes the low end of the new FY22 guidance range (of A$4.4m EBITDA) and applies an 8x multiple, one arrives at a short-term fair value target of A$35.2m (MC). Considering there are 361m shares on issue, that equates to a share price target of 9.75c (and up to 10.6c at the high end of the FY22 guidance range: A$4.8m EBITDA)). Further, if one takes a multi-year view that earnings will increase across the next couple of years, driven by Vodafone Global, that SP target rises substantially. Thus, on the surface, CCG certainly does look cheap at the current price, particularly after today's fall.

However, the above back of the envelope valuation exercise relies on the assumption that the CCG business is still in a strong competitive position. I think it would be helpful to get a view of why a key global wholesale client is reducing its spending on CCG's consumer services. If we can regain some confidence that this is an external client-specific issue and not an internal CCG service-specific issue (i.e. sub-par service or a shift to a competing service), then the market can retain some confidence that spending per customer should hold moving forward and that CCG is poised to deliver on earnings growth.

I'm changing my sentiment to hold for the time being until I can regain some confidence in the competitive position of CCG, upon which I may accumulate, should findings be favourable (the reverse also holds true). This may be an excellent accumulation opportunity or the first signs of weakness/breakdown in what appeared to be a very strong story on the surface.

Will report back with the findings.

Read More
#Break of 11.5c Resistance?
stale
Added 2 years ago

I like how the chart is shaping up here on the weekly.

It appears that there were T50 investor(s) (ones with reasonably meaningful positions) who have been exiting and creating overhead resistance at 11.5c+ (even on the day of the Vodafone announcement as evidenced by the large upper wick on the week of the 14th March 2022).

But on the other hand, there also appear to be actors who are soaking up all of the available supply. Thus, the CCG share price has been range-bound between c 9.5c and c.11.5c since the week of the 8th of Nov 2021.

However, this week, CCG closed at 12c, with a nice green candle... is this the break that suggests sell-side supply has dried up that will allow a move higher?

We will find out soon.

48d9884b8e6de163efa4bc8893b118fa9c8579.png

Read More
#Insider Buying
stale
Added 2 years ago

Not a massive amount purchased (50,000 units at 11c), but nice nonetheless to see Mr Ben Jennings dip his hand into his own pocket to buy on market.

Ben Jennings is a Non-Executive Director of CommsChoice Group. He has spent almost 18 years as an accountant working in both commercial and public practice roles in both Australia and the United Kingdom.

He established middle-market advisory firm Jennings Partners Chartered Accountants in early 2009 to provide commercial advisory, mergers and acquisition, income taxation, and Finance Director/Chief Financial Officer services to SME businesses, venture capital and private equity groups.

He is currently engaged in Non-Executive Director roles for Helioscreen Australia Pty Limited, Web Profits Pty Limited, Marimekko Australia Pty Limited and Agility Finance Pty Limited.

Ben is a qualified Chartered Accountant from the Institute of Chartered Accountants in Australia and New Zealand and holds a Bachelor of Business (Accounting) from Charles Sturt University.

Read More
#Vodafone Global Agreement
stale
Added 2 years ago

Analysis from "Icahn" on HC with input (rev est.) from CCG management:

The market is completely missing how transformative this is. This easily adds 80% - 120% upside to the current market cap by FY24e without giving credit to other significant organic and inorganic growth opportunities for the business.

The quick maths is that CCG is expecting to spend roughly ~$1m over the next year (half opex, half capex) to make $8-10m in incremental revenue at a ~60-65% EBITDA margin (70% gross margins minus a recurring annual staff cost of ~$500k-$750k). So CCG will essentially add $5m to $6.5m in incremental EBITDA by FY24e vs. the pre-announcement FY23e run-rate of $7m today.

Yes, you read that correctly, CCG has increased it's FY24e EBITDA by 70% to 95%, with scope to re-sell even more products through Vodafone in the future. Assuming this incremental EBITDA is rated at what CCG is currently trading at (7x EBITDA), this means an incremental equity value of $28m to $38.5m vs. $34m today !!!

This goes to show the tremendous optionality at play when backing a proven & aligned management team. This partnership also paves the way to winning additional ones given becoming the quasi-exclusive GLOBAL supplier of UCaaS to Vodafone Enterprise will generate significant inbound interest for CCG.

Read More
Valuation of $0.250
stale
Added 2 years ago
Read More
#Significant global agreement
stale
Added 2 years ago

CCG went into a trading halt this morning

9dc55f6724aa0931785748f8c9b0413b996727.png

Read More
#Interesting blog
stale
Added 2 years ago
Read More
#OnPlatinum Acquisition
stale
Added 2 years ago
  • onPlatinum
  • Roughly ~500 customers
  • IT Managed Services ( 54% of revenue i.e ~$8.64m)
  • Cloud Services (25% of revenue ~$4m)
  • Data Services ( 11% of revenue ~$1.76m)
  • Voice services (10% of revenue ~$1.6m)
  • Acquisition terms ( up to 18m)
  • Initial Payment
  • $8m cash
  • $2m of CCG shares ( @10.5c per share)
  • Deferred payment ( 1st July 2022)
  • $1m cash
  • $1m of CCG shares ( lower of 30-day VWAP or closing price on 1st July 22)
  • Outperformance ( Maximum 6m)
  • (24 x 2Q FY23 EBITDA ) - 12m
  • 750k EBITDA for 2Q FY23 will make it a maximum 6m ear-out
  • Acquisition funding
  • CBA term loan on favorable conditions for $10m
  • This will cover Initial and Deferred payments + transaction costs
  • Strategic Rationale
  • Establishes QLD presence with significant resources and capabilities
  • Extension of service offerings
  • Broadens into IT services market
  • Adds 16m of revenue
  • Minimum customers overlap
  • Post-acquisition, annualized revenue ~50m and annualized underlying EBITDA $7m
Read More
#AGM2021
stale
Added 3 years ago

Main Key points

  1. Singapore expansion - carrier license obtained and a new office opened
  2. Three acquisitions integrations progressing well

fbeaebc22098586f5abc55e8f70697fdce30e2.jpeg

  1. Revenue = $11.4m and EBITDA = $1.2m for 4 months ( ending Oct 2021)
  2. Strong Q1 sales with $134K MRR ( i.e 1.6m ARR)
  3. FY22 Revenue guidance confirm ( Revenue = $36-$38m and EBITDA = $4.5m-$5m)
  4. Key international accounts like Vodafone Fiji

5d08f41448b883d90bf0113f52580c7d150e62.jpeg

Read More
#Partnership and significance
stale
Last edited 3 years ago

Comms group announces partnership with Vodafone Fiji.

Vodafone Fiji is the leading telecoms provider in Fiji and planning to use Comms group to migrate existing customers from their legacy PABX to Microsoft Teams Direct Routing solution 

For example, Customer A has NEC/Samsung/CISCO on-premises PABX which provides all extensions and telecom services by Vodafone Fiji. 

If Customer A is using Microsoft Teams for their normal meeting/IM etc.. they can migrate to Microsoft Teams for PSTN calling using Vodafone through Comms Group.

Further to this: Vodafone Fiji is planning to leverage Comms group to its regional affiliates in Kiribati, Vanuatu, Samoa, American Samoa and Papua New Guinea.

Market Annoncement

Read More
#Business Model/Strategy
stale
Last edited 3 years ago

Shares on issues : 340.4m

Insider ownership : 78.6m (23%)

Market cap  = 30.6m  ( $0.09 each Share)

EV = 25.13m

Revenue = 25.2m

Underlying EBITDA= 3.2m

NPAT = 0.6m

Cash = 5.4m

 

 

  • Comms Group will operate under two brands going forward:
    • Comms Group (Global, Enterprise & Wholesale Brand - for customer with >1000 users )
    • Next Telecom (SME Brands - for customer with <1000 users)
      • Consolidation acquired businesses - Next Telecom, Binary network, next telecom and commschoice (orginial business)

 

  • Some of the customers
    • Toll
    • Daikin uni
    • Rhipe
    • IGA
    • Fleetcare

 

  • Acquisitions
    • Next Telecom - 29 January 2021
      • 8.82m purchase price
        • Upfront cash 1.67m
        • CCG Shares to owner ( 6.67m worth of shares @$0.0942 Price)
        • Deferred consideration 0.49m
    • Binary Networks - 1st April 2021
      • 1.8m purchase price
        • Upfront cash 1.44m
        • CCG Shares to owner (0.36m worth of shares @$0.09)
    • Switched On -  10th August 2021
      • 4.3m purchase price
        • Upfront cash 3.65m
        • Deferred consideration of upto 0.65m
  • FY22 based on current Run Rate
    • Revenue 36m -38m
    • Underlying EBITDA ~$5m
Read More
#Management Allignment
stale
Last edited 3 years ago

Total number of shares on the issue: 340,329,715

Insider holding ( as of 30th June 2021)

  1. John Angus Mackay : 1,656,250
  2. Peter McGrath : 14,024,813
  3. Benjamen Jennigs : 15,525,089
  4. Claire Bibby : 270,334
  5. Ryan O'Hare: 45,227,300
  6. Matthew Beale : 1,985,790

Total Insider holding: 78,689,576 (23.12 %)

 

 

Read More
#Bull Case
stale
Last edited 3 years ago

CCG (Comms Group Ltd) provides cloud communications for businesses.

Their main product is a Global business phone platform integrated with Microsoft Teams. i.e Any SME or mid-tire corporate business within Australia and Asia have Office 365 subscription and they want to add phone system functionality to Microsoft Teams client, they can provide it per user per month bases)

There obviously is a tailwind for the business at the back of COVID-19 and WFH as well as an uptick in Microsoft Teams adoption.

CCG has acquired few businesses recently (Next Telecom, Binary Networks and  Switched-On telecom - today 10th August 2021) and confirmed unaudited FY21 revenue $25.2m ( up 30% from FY20) 

Also advised that Run-rate for annualized EBITDA expected to $5m

$24m Market Cap with $5m EBITDA and growing revenue is attractive.

I will keep adding my commentary here about management and why I am bullish on this business 

Change in Management (Turnaround story)

Grant Ellison who founded CommsChoice and let the business until it got acquired by CCG in Dec 2017. Grant departed from business in November 2019

Peter McGrath was interim CEO and appointed as permanent CEO and Managing Director in May 2020

Peter has a strong history of leading and growing telecom companies ( Uecomm, AAPT, NExtGen etc). He restructured the business while he was interim CEO and there was an improvement in results from 2019 to 2020.

In Feb 2020, Adrian Luciano joined the company ( Adrian was also part of all Peter's past companies and they built the team around them to grow the company - same thing is happening at CCG currently)

Peter and Adrian are in process of growing the company through organic and acquired growth. Last year, they acquired 3 telecom businesses. All acquisitions looks complimentary 

If you look at news flow, there is significant insider buying recently.

 

Read More