No takers for eChannelling voluntary offer as minority shareholders see value under Mobitel

There have been no takers of SLT Mobitel’s voluntary offer to eChannelling as minority shareholders apparently see more value under the new ownership and management whilst some viewed the offer price of Rs. 6 was very low.

When the voluntary offer closed last week Mobitel said it has succeeded only in acquiring 87.59% stake or 106.97 million shares from major shareholder Senior Marketing Systems Asia Ltd., Singapore for Rs. 642 million. 

eChannelling as at June 20, 2016 had 1,647 shareholders and a public float of 12.41%.

In the June quarter eChanneling’s highest price was Rs. 11.90 and the lowest was Rs. 8 before closing at Rs. 8.50. However these figures were lower in comparison to a year earlier when the stock closed at Rs. 13.50 after hitting a peak of Rs. 15.10 and a low of Rs. 11.60. Last week eChannelling closed at Rs. 8.

Some analysts said minority shareholders opted to hold on rather than having cash even lower than the price at which they may have bought. Others said the voluntary offer was far too low. The 52-week highest was Rs. 12.40 and the lowest was Rs. 7.00. However its net asset per share was Rs. 1.54 as at June, 2016, up from Rs. 0.95 a year earlier and Rs. 1.42 as at December 2015. Some cited the NAV to point to Mobitel paying a hefty premium. Total assets stood at Rs. 254 million as at June 2016.

In mid 2014, SMS paid Rs. 14 per share to buy 21.43 million shares and up its stake to 47.5% and trigger the SEC’s Takeovers and Mergers Code. The offer gave Singapore firm a further 39% stake.

Thereafter in January last year eChannelling amalgamated with its fully owned subsidiary ECL Soft Ltd.

The number of eChannelling appoints have grown to over 700,000 in FY16 from 500,000 in FY11. 

In FY16, eChanneling revenue grew to Rs. 217 million from Rs. 163 million in the previous year.

Profit from operations was Rs. 101 million as against Rs. 99.5 million in FY15. There was a sharp rise in administrative expenses from Rs. 62 million in FY15 to Rs. 108.4 million in FY15.

After tax profit improved from Rs. 64 million to Rs. 77 million.

In the first quarter of FY17, revenue was down to Rs. 40 million from Rs. 51 million a year earlier. Profit from operations amounted to Rs. 16 million down from Rs. 25 million and after tax profit was down from Rs. 19.7 million to Rs. 15.7 million. Retained earnings were Rs. 95 million, up from Rs. 27 million a year earlier.

In previous years profits have been higher. For example Rs. 98 million in FY11 and Rs. 91 million in FY14.

The number of hospitals acquired as of 31st March 2016 was 155 among which 123 are private hospitals and 22 are private Ayurveda hospitals. For the total number of hospitals, the Company had recorded a significant increase comparing to 62 recorded for FY 2014/15. 

In FY16, eChannelling started a pilot project with the Maharagama Cancer Hospital to provide our booking system to the hospital. “This is an initial step for us to tap into Government Hospitals in the future,” the Company said.

It also launched a new responsive and user friendly website, mobile application for both android and iOS phones.

It also developed several new functions for the doctor channelling system for implementation in FY17.

“With the strong performance and growth in FY 2015/16,as well as with our solid strategy, we expect

to see continued significant growth and success for the next financial year,” eChanneling Chairman and CEO Tatsuya Koike said in the Company’s FY2016 Annual Report. 

He also said in FY 2016/17 the Company will continue to address untapped opportunities to extend doctor channeling service and at the same time explore new business opportunities in other sectors of the healthcare industry.