Feltex IPO

[Binklebonk]

Anyone got any thoughts on this one?

Fundamentals look fairly attractive but does this industry have any risks from alternative emering products?
Also possible slowdown in building activity.

I've ordered a prospectus to have a closer look.

[Noddy]

I've had a look at the prospectus. Budgeted increase in sales for next year with an increase in margins. A $14.5M property revaluation this year (couldn't find where it appears in the accounts). Vendors taking their money and running. Still high level of debt. Possible slowing of construction activity.

I won't be touching it.

[willy_wonker]

Willy is not touching any IPOs this year, unless it is an "O" for awesome company.

You can buy it at a cheaper after it list on the market.

[Nimble]

Frank Newman's comments from 6/5/04 are an interesting read. I personally think he is a bit optimistic. Mood of the markets at 18 seems high and not sure management justify an 8 either. Have decided not to participate in IPO.

To assess the issue I have again reviewed it using the Stag’s Scorecard from Making Money on the NZ Sharemarket. The evaluation sheet assesses new floats using six criteria, and rates an issue out of 100.
- Mood of the market (20) – The success of the earlier floats shows how receptive the market is to new issues. Score 18 out of 20.
- Media coverage (20) – A little early to tell because there has not been a lot of coverage yet. I suspect it will be reasonably positive. Subject to this being a presumption, I score this variable 13 out of 20.
- Availability of shares (20) – The issue is large, and should be available. However, given the demand for IPOs, the issue is likely to be oversubscribed. Score 13 out of 20.
- Purpose of the issue (20) – Basically the main shareholder is getting out. However, this is the nature of their business so it should not be a drag on the issue. Score 14 out of 20.
- Quality of management and directors (10) – By all accounts the management is capable. Score 8 out of 10.
- The fundamentals (10) – On price: earnings and dividend yield measures the issue is attractive. On this measure alone the issue is likely to succeed. The forecast p:e is between 10 and 11 time projected 2005 earnings, and a dividend yield of around 9%. (This compares to a pe of around 15 and a dividend yield of 8% for Cavalier) The negative is that the fundamentals are projected and based on the company achieving significant earnings growth. Score 7 out of 10.

Total score 73. According to the Scorecard a score between 51 and 74 means, “Should be a small premium on listing”. Given the score is at the upper end of that range, investment is recommended. There appear to be minimal risk of the issue being a dud, and every possibility that there will be a gain of at least 10% on issue.

[winner69]

Plenty of money to be made by management .... Sheppard in on the act again by saying mega options on steriods

8 million options at list price (reduced by dividends) amongst a few execs does seem pretty rich ... but then I'll be told that the company will perform better if the execs are well and truely motivated

ANd we do know before we front up with any money

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3567941

[Speculator]

Price at $1.70. I'm passing on this one.

How did you know about property revaluation? What account does this appear in? Sales? A reserve?

[Noddy]

There is a small note at the end of the accounts about the property revaluation. I don't know if this was taken to the BS or P&L as the accounts do not show it. If to the P&L then it makes the issue look even worse.


quote:Originally posted by Speculator

Price at $1.70. I'm passing on this one.

How did you know about property revaluation? What account does this appear in? Sales? A reserve?

[willy_wonker]

This year so far PBG, JST & Mike Pero all listed BELOW IPO prices... ouch ! So, what is so great about Feltex? Interest rate up and housing down.

[Speculator]

Noddy, it went through a revaluation reserve in the Statement of Movements of Equity. It was a Post Blance Date adjustment which alters the equity ratios as at June 2004.

Well spotted.

[zyreon]

Frank Newman is good people

But I will be awaiting the prospectus to peruse the merits/risks etc.

Unless I see anything bad though I reaffirm my intention on taking a punt on this one. I will be targeting 10% (increase!! ^_^)

again though my decision will be based on the prospectus etc, hopefully the pessimism displayed thus far in this thread does not reflect the overall interest in this issue.

[whatsup]

Mate of mine who used to work for Feltex said to me "invest here at your peril" its been cleaned out before!

[Lawso]

Got my allocation notice today - 6192 shares in exchange for $10k of 10.25% bonds. The shares are issued to bondholders at 95% of the $!.70 issue price. At $1.70 my shares are worth $10,526 or looked at another way, I've acquired them for 161.5c.

I'm really wary of all these new floats but am feeling comfortable with this one - so far!!.

[Noddy]

Just received an email from my broker. They have a few Feltex left on firm allocation if I'd like some. Have to be quick though.

They haven't been rushed have they. Don't like the chances of any stag profits on this one.

[marinesalvor]

if Access have spare shares you know the IPO is struggling!

[willy_wonker]

MS, Feltex is going to struggle on listing day. Another promoter laughing to the bank?

[grumpy]

Well, for the first time ever my broker called ME to
ask wether I wanted to have an allocation in the IPO.
Frightening.

[marinesalvor]

yes grumpy - they are getting desperate - price will head south asap

[zyreon]

*shrugs*

I Dint have the cash to jump on this one, maybe a good thing?....

THE KING says as far as i can remember its about the third time this company has been sold back to investors, come in again BOYs..

Funny the name tells the story Feltex was a cheap carpet [Well was not a real carpet.] made after WW2. and graced the floors of Grand mars house, well ,well.:):D:)

Watching from Australia THE KING

[craic]

King, I worked on the night shift as a spinner for Feltex at Riccarton Carpets in about 62-63. Great job, 8 hour shifts finished for the week on a friday morning at 8am and could shoot home and have a sleep and spend the weekend on the town with a paypacket double tyhe normal because of bonuses. My self and a fellow named Frank Hussey worked either side of a doubling frame and we were the fastest in the business. It was the only time I ever came across a NZ employer who had the perfect formula for paying employees to get the very best for his buck. Bradford (UK) spinners produced X pounds of wool per hour from a machine. For every X pounds you produce over and above that figure in a 8 hour shift, I will pay you one hours pay as bonus. From Frank and I each shift, they got an extra shifts production. The cost was a basic shifts pay at seven shillings an hour and they had no extra costs no overtime payments, little or no sickies.
Feltex was not produced there. Riccarton produced the finest Axminister and a couple of loop pile types. One night (under new management) a time and motion fellow with a stopwatch arrived and made notes all night. I had to kick him out of the way several times but later we were advised that our bonuses were too high and for the same amount of extra work, we would now get the price of a packet of cigarettes instead of an extra day's pay. I we3nt off to work on the take-out at Crown Crystal Glassware in Hornby the next week.

THE KING says Good story craic they used to say the good old days bugger they where terrible work 52 hour week for $10, was not Good.:(

So you did not see Feltex made as the name says it was a felt type of yuk but whats all you could get in AUS & NZ in the 50`s then in one giant step came Westminster rubber backed, oh what a feeling, but soon passed onto todays types. In my early days i also did time & motion ended up in to many blue`s dumped it and joined the Navy.[^]

Watching from Australia.

[mikescott]

I be remember that same thing happened with Promina last year when nobody was wanting the shares. I be called by broker who gave me stock but I nervous so selling in first week when Promina listed.

THE KING says got so upset by this story I forgot sign off.[8]

Regards THE KING

[mikescott]

Is it be good sign when big fund managers they say they be not liking Feltex? It was same thing they be saying last year about Freightways? And they be saying same thing last year too about Promina? This analyst he be from a firm in Australia saying that Promina only be good only for $1.60? I have been sold my Promina first week and only making small monies is not happy and be missing Freightways because I am listening to stupid fund managers who not like stock.