Value ...
62.5c soon
+51.7c later (1)
+24.0c residual (2)
138.2c Total (approximate)

Not what I call great value.

(1) up to 57.5c after Tarawera sold, assuming $165M realised. Actual may be less, and payment probably 9+ months out. Therefore current value is probably less than 57.5c (say 10% discount).

(2) 46M forecast EBITDA, 2004. Do we believe them? Do we believe anyone who uses EBITDA? If EBITDA is $46M, how much less will actual Earnings be? Payout has already been much delayed, giving artificially favourable Interest situation. CHH and Pension funds are reducing cutting for next few years, which should increase log prices. Freight rates are not looking good. The consumer market globally does not look very robust to me. Logic says that the middle men face a squeeze ... just when Tenon become solely middle men! Say $22M (from GS projection) viable ongoing earnings = 4cps. A multiple of 6 may be appropriate for a company that has the record this one does ... so 24cps residual value. One offs like the $9M currency gain may give a temporary lift, as reported profit is likely to exceed on going profit.