Fliway Listing

[NZSilver]

Another freight and logistics company. I don't own any myself however MFT and FRE listed on NZX.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11408273

Interesting google search; https://www.google.co.nz/search?q=logistics+comapnies+nz&oq=logistics+comapnies+nz&aqs=chrome..69i57j0l5.6784j1j4&sourceid=chrome&es_sm=93&ie=UTF-8#q=freight+and+logistics+nz

Seems there are plenty in this space, looks like TNL and Mainfreight are the big guys. Surely its competitive out there.

[babymonster]

interesting.. could be a good listing...

[Snow Leopard]

mostly transport and logistics specialising in whitewear storage and deliveries,

You mean like wedding dresses as well as traditional cricket and tennis clothing?

Best Wishes
Paper Tiger :blush:

[Harvey Specter]

Seeking $30=$50m

no other relevant details yet though I will be searching the gossip columns for info. A Hart and a Hawksby should be worth pages of stories in the Hearld!

[tobo]

That is is one congested sector - there are SO MANY logistics operators out there, but it must be good money for relatively easy setup to attract so many privately owned businesses as well as the big boys. And actually there are specialty areas as well as the owners who will do whatever you want.
I liked this on their website:

For decades we have provided unique services that have seen us deliver -

Monet’s paintings to art galleries;
install highly sensitive medical equipment into multi-storey hospitals via the roof;
freight AV equipment for rock concerts;
assembled cellular towers on mountain tops;
ship industrial furnaces from Europe to Tauranga… and then via road to Kawerau;
facilitated multi-site technology rollouts & installations concurrently;
moved our competitors computer servers (twice)
and even moved McLaren F1’s, Race Horses and Super Yachts.

[ari]

mostly transport and logistics specialising in whitewear storage and deliveries,

Originally a large portion of workload was as Hi-Tec transporters....ie computers, photocopiers etc

[Jay]

Originally a large portion of workload was as Hi-Tec transporters....ie computers, photocopiers etc
That's what I was going to say ari, use to see their trucks around all the time, not so much now - I suppose photocopiers are on the way out and servers etc for small to medium businesses in may cases are no bigger than a desk top pc.

[ari]

That's what I was going to say ari, use to see their trucks around all the time, not so much now - I suppose photocopiers are on the way out and servers etc for small to medium businesses in may cases are no bigger than a desk top pc.
Back in early '90's they shifted a lot of the old mainframes (2m high)...mainly exported (by air!) for recovery of precious metals.

[macduffy]

You mean like wedding dresses as well as traditional cricket and tennis clothing?

Best Wishes
Paper Tiger :blush:

I don't think so, Tiger.

Not much white clothing worn at cricket or tennis these days. Wouldn't know about weddings.

I'll be reading the investment statement in due course though.

[Harvey Specter]

Back in early '90'sThat's almost as relevant as revenue and profit figures from 2007. ;)

[KiwiGekko]

That's almost as relevant as revenue and profit figures from 2007. ;)

Not quite 2007, but around 5 years ago (so take this with a grain of salt as that is quite a bit of time) I used to do quite a bit of business with Fliway (and other freight / courier companies), so I know a bit about these guys or at least how they operated at that time.

Back then they were promoting themselves as being fragile freight carriers and charging a modest premium for this service. They have moving trucks vs freight trucks which are fitted internally with tie downs allowing them to strap items down to prevent them "banging around" - along with carpet / foam padding to separate items. From what I saw they do carry a lot of fragile things, so there is a niche factor here, although I don't think its terribly hard to emulate.

However, honestly we only experienced slightly lower breakages in the items we were shipping (they weren't electronics) with them vs the "normal freight companies" & ultimately it was our own R&D into better packaging that resulted in much more success dealing with freight companies in NZ. After this we didn't use Fliway as much - because it frankly wasn't as cost-effective and their nationwide coverage is not as comprehensive. I understand this is because they do a lot of it themselves vs using sub-contractors.

It is worth mentioning that they always send out two people, which when compared to other companies who would send a single driver made a bit of difference, but also added to the cost. There are upsides here for sure, but it made rural deliveries quite expensive and frankly not that practical given the breakage rates we experienced.

I also know other people who do move large scanners / printers - electronic equipment basically worth 6 figures, (so not your inkjet printer at the office) and they have a "special division" for moving those, these guys were better I understand. However, they did manage to drop one off the back in the customers parking lot. That sounded like it was a fun day!

My assessment is they do "OK" in the niche they operate, but that is somewhat limiting in itself as a business. Don't believe the hype, they're not immune from the same issues all other transport & logistics companies suffer from - but they do have slightly more control (for good and bad) over their nationwide network. I will be watching with interest purely because of my historical dealings with Fliway, however I personally don't see them as being significantly different from the other options on the NZX.

Cheers,

KG

[GoldenStag]

Prospectus out apparently...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11412972

[Beagle]

Over indulged ? rich kids pocketing the vast majority of the money to augment their already extremely comfortable lifestyle ? It'll have to make a really compelling case for itself on a valuation AND growth basis to tempt me. Disc Own MFT which has a long and highly credible track record and has earned its hard won reputation with a five year average EPS growth of 14% and therefore fully justifies its 2015 forward PE of 19 times earnings. I wonder what this newcomers average EPS growth has been over the last 5 years ? "Best of Breed regardless of price" Warren Buffett.
Forsyth Barr managing the issue...Hmmmm, who can forget Credit Sails, Feltex, South Canterbury Finance ?

[noodles]

Here is the link. I nearly fell asleep reading it

http://www.business.govt.nz/companies/app/service/services/documents/C54F0E121D1D107AB511A9156C5F5B5F

[noodles]

Over indulged ? rich kids pocketing the vast majority of the money to augment their already extremely comfortable lifestyle ? It'll have to make a really compelling case for itself on a valuation AND growth basis to tempt me. Disc Own MFT which has a long and highly credible track record and has earned its hard won reputation with a five year average EPS growth of 14% and therefore fully justifies its 2015 forward PE of 19 times earnings. I wonder what this newcomers average EPS growth has been over the last 5 years ? "Best of Breed regardless of price" Warren Buffett.
Forsyth Barr managing the issue...Hmmmm, who can forget Credit Sails, Feltex, South Canterbury Finance ?

Here is the growth rates as per prospectus. Readers can make their own decision if they justify a pe 12-14


PERIOD
Revenue
Growth
EBITDA
Growth
NPAT
Growth


12
months
ended 30
June 2012
73.20

7.400

3.6



12
months
ended 30
June 2013
74.40
1.64%
7.400
0.00
3.6
0.00


12
months
ended 30
June 2014
81.50
9.54%
8.30
12.16%
4.4
22.22%


12
months
ended 30
June 2015
85.30
4.66%
8.700
4.82%
3.9
-11.36%


12 months
ending 31
December
2015
85.60
0.70%
9.500
9.20%
4.5
15.38%











AVERAGE

4.14%

6.54%

6.56%

[Beagle]

Here is the growth rates as per prospectus. Readers can make their own decision if they justify a pe 12-14


PERIOD
Revenue
Growth
EBITDA
Growth
NPAT
Growth


12
months
ended 30
June 2012
73.20

7.400

3.6



12
months
ended 30
June 2013
74.40
1.64%
7.400
0.00
3.6
0.00


12
months
ended 30
June 2014
81.50
9.54%
8.30
12.16%
4.4
22.22%


12
months
ended 30
June 2015
85.30
4.66%
8.700
4.82%
3.9
-11.36%


12 months
ending 31
December
2015
85.60
0.70%
9.500
9.20%
4.5
15.38%











AVERAGE

4.14%

6.54%

6.56%



Thanks mate for putting in the work on that analysis. As far as I'm concerned I'll stick with MFT.

[GoldenStag]

I thought I would do the obvious comparison with MFT and FRE...


7181

The multiples should be roughly the same across the board for each company, meaning that a scale up in the revenue/EBITDA/Profit should have the equivalent scale up in price (in a perfect world). In this case it seems okay for FRE, but not quite right for MFT. The way I read this is that MFT is actually a good deal compared to Fliway and FRE, though I don't have much knowledge of these companies or their recent history.

This doesn't seem to scream bargain or bad deal either way. Presumably they would have gone through the same exercise when trying to work out the pricing for the IPO.

Anyone able to read more from this data?

Cheers,

GS

[GoldenStag]

To be clear though, the price multiplier being the lowest multiplier out of all the ones for both MFT and FRE indicates that you are getting less revenue/EBITDA/Profit etc from Fliway proportionately for the price of the MFT and FRE shares. i.e. you get less bang for your buck, and it would be better to buy MFT and FRE throughout the entire indicative price range for the Fliway IPO.

So, Fliway would need a terrific growth story above that of FRE and MFT to justify the higher price ratio, no?

[noodles]

I think the PEG ratio model would be the most appropriate to compare the businesses.

I suspect that MFT would come out the cheapest using that model

[Beagle]

I thought I would do the obvious comparison with MFT and FRE...


7181

The multiples should be roughly the same across the board for each company, meaning that a scale up in the revenue/EBITDA/Profit should have the equivalent scale up in price (in a perfect world). In this case it seems okay for FRE, but not quite right for MFT. The way I read this is that MFT is actually a good deal compared to Fliway and FRE, though I don't have much knowledge of these companies or their recent history.

This doesn't seem to scream bargain or bad deal either way. Presumably they would have gone through the same exercise when trying to work out the pricing for the IPO.

Anyone able to read more from this data?

Cheers,

GS

Before buying into MFT late last year I reviewed the EPS performance and growth rates on FRE and MFT over the last decade. FRE's average five year growth rate in EPS was on 4% and MFT was 14%. Both selling on identical 2015 PE multiples when I bought. FRE also seemed vulnerable to the GFC downturn, MFT far less so.

I put a lot of stock into actual EPS growth over the last 5 years. I'm an old school accountant who believe talk is cheap, (just show me what you've done), so I like to see companies making promises and delivering on them year after year after year. In my opinion you can't really use any valuation model reliably until you have a long history substantiating past performance which gives more credibility and reliability to future growth and forecasts.


I think the PEG ratio model would be the most appropriate to compare the businesses.

I suspect that MFT would come out the cheapest using that model

I like my own version of Ben Graham's valuation formula which uses 1G instead of 2G and uses forward EPS rather than most recent past EPS.

Using Ben Grahams formula v= EPS x (8.5 + 2G) where EPS is 90 cps and G is 14 MFT is worth $32.85

Using my formula using broker consensus 2016 EPs of $1.00 I get v = 1.00 x (8.5 + 14) = $22.50.

MFT probably one of the most under-priced stocks on the NZX in terms of buying growth on the cheap.

I see a report in the media on the weekend that this new company is taking up the possibility of acquisitions. IMO People would do well to ignore the hype and talk and ask themselves whether they're better off going with a company with a long and proven record of walking the talk and delivering sustainable and proven growth in EPS for its shareholders.

[Beagle]

I thought I would do the obvious comparison with MFT and FRE...


7181

The multiples should be roughly the same across the board for each company, meaning that a scale up in the revenue/EBITDA/Profit should have the equivalent scale up in price (in a perfect world). In this case it seems okay for FRE, but not quite right for MFT. The way I read this is that MFT is actually a good deal compared to Fliway and FRE, though I don't have much knowledge of these companies or their recent history.

This doesn't seem to scream bargain or bad deal either way. Presumably they would have gone through the same exercise when trying to work out the pricing for the IPO.

Anyone able to read more from this data?

Cheers,

GS

Before buying into MFT late last year I reviewed the EPS performance and growth rates on FRE and MFT over the last decade. FRE's average five year average growth rate in EPS was only 4% and MFT was a highly credible 14% average per annum. Both selling on identical 2015 PE multiples when I bought which seems silly to me. FRE's EPS was quite vulnerable to the GFC downturn, MFT far less so.

I put a lot of stock into actual EPS growth over the last 5 years. I'm an old school accountant who believes talk is cheap, (just show me what you've done), so I like to see companies making promises and delivering on them year after year after year. In my opinion you can't really use any valuation model reliably until you have a long history substantiating past performance which gives more credibility and reliability to future growth and forecasts.


I think the PEG ratio model would be the most appropriate to compare the businesses.

I suspect that MFT would come out the cheapest using that model

It does by miles mate. I like my own version of Ben Graham's valuation formula which uses 1G instead of 2G and uses forward EPS rather than most recent past EPS.

Using Ben Grahams formula v= EPS x (8.5 + 2G) where EPS is 90 cps and G is 14 MFT is worth $32.85

Using my formula using broker consensus 2016 EPs of $1.00 I get v = 1.00 x (8.5 + 14) = $22.50. MFT probably one of the most under-priced stocks on the NZX in terms of buying growth on reasonable forward earnings multiple.

I see a report in the media on the weekend that this new company is taking up the possibility of acquisitions. IMO People would do well to ignore the hype and ask themselves whether they're better off going with a company with a long and proven record of walking the talk and delivering sustainable and proven growth in EPS for its shareholders.

I suspect a lof of people have trouble getting their head around buying a $16 share. A five for 1 share split wouldn't be a silly idea in my opinion. (Like RYM and AIA did a while back).

[Stumpynuts]

I'm currently working within FRE - The business strategy for FRE seems to be moving towards more online based services for diversification, rather than always just the traditional courier delivery business model.
Read some of our previous investor presentations to see the direction it is going.

Funnily enough I have also worked at Fliways as well, at the same as working at FRE. I ended up doing casual Sunday work unloading TCP containers out at Fliways Auckland Airport warehouse.

[babymonster]

Which company you like to work for?
I'm currently working within FRE - The business strategy for FRE seems to be moving towards more online based services for diversification, rather than always just the traditional courier delivery business model.
Read some of our previous investor presentations to see the direction it is going.

Funnily enough I have also worked at Fliways as well, at the same as working at FRE. I ended up doing casual Sunday work unloading TCP containers out at Fliways Auckland Airport warehouse.

[Stumpynuts]

Which company you like to work for?


I can't really compare to say which company I like more than the other, since I've been full-time within FRE but at the same I only worked on Sundays at Fliway in the depot area - Sorting freight for local courier vans and linehaul trucks.

MFT and FRE, and to a lesser extent Courierpost are the dominant players in local, short-haul and interisland deliveries.
Each also has their own subsidy company that have specialist services eg. MFT has Chemfreight for Dangerous goods, FRE has Sub60/Stuck for urgent high priority deliveries, Courierpost has DHL & NZ Post to back them up.

When I last worked at Fliways back in 2010 I used to drive the truck that had UPS banners on the curtainsides. Fliways at that time had a working relationship with UPS, so a lot of incoming freight for Fliways is UPS freight.

I'm not sure if this helps anybody?

[babymonster]

Anyone is going to apply?

[GoldenStag]

Anyone is going to apply?

I'm still in two minds about this one. It doesn't scream out as a bargain, but also could sit there as a decent little earner in the portfolio. For me it seems they've priced it directly in the 'average' zone where it can't compel me either way. A decent offer, nothing too special.

I'm a little wary because Forbarr is floating it. They floated Arvida and put it at the top end with no further demand in the second market so it didn't leave anything on the table for anyone else and has languished ever since. It was clear at the time that they should have priced it a little lower in the range, but they, or the vendors, were a bit too incentivised. It doesn't do Forbarr's reputation very well to repeatedly do floats in this fashion, so hopefully one of the seniors there reads this post.

Might go for Fliway... still deciding.

[Beagle]

I used to be a client of Forbar...past tense, enough said.

[Stumpynuts]

Watch your investments Fli (a)way......... hahahahaha :p
Haha just kidding - I work for the competition of course I'm going to give others some stick :)

[macduffy]

Far be it for me to take issue with the world's most successful longterm investor but there have been some spectacular IPO's over the years - at least in this part of the world. Commonwealth Bank, Woolworths, have been two of the best and, closer to home, POT, RYM. Mainfreight floated by selling a similar percentage of the company to the public as Fliway owners are proposing. I'll be looking for some more hard numbers but this just might be the time to take a belated stake in Mainfreight, instead!

[GoldenStag]

better to stick to MFT , growth, management , model a lot more compelling.
Toll looked into buying this a few years back when they were buying everyone, JDlyons, Express internatonal, united and walked away.

Looking through your posts on this, you seem very knowledgeable. How do you know so much about this company and the industry? (if you don't mind me asking, that is)

[GoldenStag]

Far be it for me to take issue with the world's most successful longterm investor but there have been some spectacular IPO's over the years - at least in this part of the world. Commonwealth Bank, Woolworths, have been two of the best and, closer to home, POT, RYM. Mainfreight floated by selling a similar percentage of the company to the public as Fliway owners are proposing. I'll be looking for some more hard numbers but this just might be the time to take a belated stake in Mainfreight, instead!

Seems a journalist shares your point of view also with the following "what if this were like MFT?" article...
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11414488

I was rolling the deal through my head yesterday, pulled out my drive and a shiny new Fliways truck drove past me. This must be a higher power telling me to invest, I thought, but then a Freightways truck went past as well, so looks like any higher power was having a chuckle. Looks like I'll just have to do my own research....

[Harvey Specter]

pulled out my drive and a shiny new Fliways truck drove past me. This must be a higher power telling me to invest, I thought, but then a Freightways truck went past as well,
Do you live at the airport?

[GoldenStag]

quite the busy road...

[GoldenStag]

I'm in for this one.

[noodles]

I'm in for this one.
What for? A stag or a longer hold?

[GoldenStag]

What for? A stag or a longer hold?

I note that Forbar seem to be opening this up to other brokers. This did not seem to happen with Arvida and Evolve (both Forbar). Does this mean that Forbar are struggling to get it away?

I'm in for the longer run.

I heard FNZC is in there which actually makes me feel better about it. They have had a few good floats of late, and they have a reputation to uphold.

For their float cost, Fliway sure haven't had much PR work go on. I have run google news alerts across since the first whispers of the IPO. They've only really had about four core articles come out. I'm not sure what their fund management roadshow was like, but I hope they put on a good show for the funds with free sammies. It is these guys that will make or break the float. I think retail investors will end up being a small sideshow.

Either way, I'm in, I think a 12-14 PE is good and the gross divvy is good (forecast). There might be some movement to correlate closer to the main board's average PE rate, which will help the share price I think (over a couple of months).

I don't like the 2015 3 customer revenue risk, I'm ambivalent about Duncan being in or out of the business, and I think the hastily formed board with Stobo being paid more per board meeting than Joan Withers does on MRP is a bit rich. However; the financials of the company, which is the part I really care about, are okay and worth a stab.

I might be right, I might be wrong. One has to take a stand either way, and I'm in.

[noodles]

I'm in for the longer run.

I heard FNZC is in there which actually makes me feel better about it. They have had a few good floats of late, and they have a reputation to uphold.

For their float cost, Fliway sure haven't had much PR work go on. I have run google news alerts across since the first whispers of the IPO. They've only really had about four core articles come out. I'm not sure what their fund management roadshow was like, but I hope they put on a good show for the funds with free sammies. It is these guys that will make or break the float. I think retail investors will end up being a small sideshow.

Either way, I'm in, I think a 12-14 PE is good and the gross divvy is good (forecast). There might be some movement to correlate closer to the main board's average PE rate, which will help the share price I think (over a couple of months).

I don't like the 2015 3 customer revenue risk, I'm ambivalent about Duncan being in or out of the business, and I think the hastily formed board with Stobo being paid more per board meeting than Joan Withers does on MRP is a bit rich. However; the financials of the company, which is the part I really care about, are okay and worth a stab.

I might be right, I might be wrong. One has to take a stand either way, and I'm in.

Thanks. Maybe I'm being too fussy. I just wish either dividend rate was a bit higher or the growth profile a bit stronger.
I think the argument that it will re-rate to MFT and FRE has some merit. This would of course be tempered by the low market cap compared to FRE and MFT.

[Beagle]

Thanks. Maybe I'm being too fussy. I just wish either dividend rate was a bit higher or the growth profile a bit stronger.
I think the argument that it will re-rate to MFT and FRE has some merit. This would of course be tempered by the low market cap compared to FRE and MFT.

You're not being too fussy mate. Compared to MFT this is a pup and really the promoters are leaving nothing on the table for new investors...(not usual for Forbar). I'd still not bother right at the bottom of the book build range. i.e. a PE of 12 is top dollar considering their very modest track record IMHO. Talk in the Herald that the company is looking at acquisitions is cheap talk...really no new money is going into growing the business...expensive float price relative to amount raised and the vast majority going to the vendor's including shareholder loans. Anyone can talk the talk about acquisitions...look at the very modest growth rate of the company and that tells the real story and what's their track record with bolt on acquisitions in the past, none ?
OTOH we have MFT with an average EPS growth rate of 14% for the last 5 years and a very long and strong track record of building credibility before that on a modest, (for a strongly growing company) forward PE of 19.
This new pup or add some real solidarity to one's portfolio with a strong growing company like MFT....a no brainer IMO.

[GoldenStag]

Hmmm... I think your opinion here is fairly valid, but what about these bits?....


I'd still not bother right at the bottom of the book build range. i.e. a PE of 12 is top dollar considering their very modest track record IMHO.
What about a PE of 12-14 for a company that isn't on a growth path? I agree with the statement that the growth they show is spotty and their track record isn't a super solid Xero-type launch, but I'm considering it in the context of what I would pay for a company that wasn't growing amazingly - and a PE of 12-14 seems reasonable in the context of the current market. If it could pay out the same dividend for the next ten years, then my portfolio would be happy.



Talk in the Herald that the company is looking at acquisitions is cheap talk...really no new money is going into growing the business...
I agree, this talk is just hype. My guess is that Duncan has something that he wants to do next, and will need the capital to move on. I see this as a gradual sell down into the market. I don't care if he is in or out of the business as I don't see him adding to much to the business either way.



OTOH we have MFT with an average EPS growth rate of 14% for the last 5 years and a very long and strong track record of building credibility before that on a modest, (for a strongly growing company) forward PE of 19.
Yes, agreed, and I would pay the high PE for MFT for this reason - hence its valuation. With Fliway we have the possibility of growth at a PE price of no growth, so on balance I think it is still worth a go. My expectation is that my portfolio will have MFT, FRE and Fliway all in it. I don't see why we have to choose one over the other - just choose the weightings.

Fliway could have skinned the divvys differently to make it look higher. They could have held off the fleet upgrades they did in the last few years to make the financials look better.... ....And then we would have had some juiced up financial reports that made the company look really good. But in the end it looks like they've put them out there without any massaging, and said "here, make up your own mind". This made me quite happy about the whole thing. It doesn't look like they're hiding anything - even making it obvious that Duncan is selling because he wants the money.

[GoldenStag]

Fair points. I agree with both of these.

By the way, is there any chance that someone could do a takeover to secure the UPS work and revenue stream?
A small cap like this could be an easy purchase for one of the bigger boys - and any takeover would be accretive and could be funded through debt fairly easily. Could this have been considered by some of the players?

[Beagle]

Hmmm... I think your opinion here is fairly valid, but what about these bits?....


What about a PE of 12-14 for a company that isn't on a growth path? I agree with the statement that the growth they show is spotty and their track record isn't a super solid Xero-type launch, but I'm considering it in the context of what I would pay for a company that wasn't growing amazingly - and a PE of 12-14 seems reasonable in the context of the current market. If it could pay out the same dividend for the next ten years, then my portfolio would be happy.


I agree, this talk is just hype. My guess is that Duncan has something that he wants to do next, and will need the capital to move on. I see this as a gradual sell down into the market. I don't care if he is in or out of the business as I don't see him adding to much to the business either way.


Yes, agreed, and I would pay the high PE for MFT for this reason - hence its valuation. With Fliway we have the possibility of growth at a PE price of no growth, so on balance I think it is still worth a go. My expectation is that my portfolio will have MFT, FRE and Fliway all in it. I don't see why we have to choose one over the other - just choose the weightings.

Fliway could have skinned the divvys differently to make it look higher. They could have held off the fleet upgrades they did in the last few years to make the financials look better.... ....And then we would have had some juiced up financial reports that made the company look really good. But in the end it looks like they've put them out there without any massaging, and said "here, make up your own mind". This made me quite happy about the whole thing. It doesn't look like they're hiding anything - even making it obvious that Duncan is selling because he wants the money.

Ben Graham's investment valuation thesis is a PE of 8.5 is correct for a no growth company and his widely respected valuation methodology was formulated when the risk free rate was 4.4% which is what the brokers are using in their valuation models now.

Okay there is some growth so perhaps a PE of 12 isn't inappropriate. You make a fair point that one doesn't have to chose between this MFT and FRE, simply make allocations based on their relative merits, so I'll rephrase my opinion. On a PE of 12 I think the vendors are taking advantage of a very fully priced market and listing at an opportune time.

[Harvey Specter]

By the way, is there any chance that someone could do a takeover to secure the UPS work and revenue stream?
A small cap like this could be an easy purchase for one of the bigger boys - and any takeover would be accretive and could be funded through debt fairly easily. Could this have been considered by some of the players?I'm sure they would have shopped this around first so you can assume no takers in the short term.

[GoldenStag]

Is anyone else in? Or am I out on a limb here?

[GoldenStag]

Herald article about Fliway and CBL...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11418803

[GoldenStag]

Set at $1.20

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11419403
and...
http://www.nbr.co.nz/article/fliway-ipo-priced-120-bookbuild-bottom-bookbuild-range-people-say-bd-170258
and...
http://www.sharechat.co.nz/article/e22416b0/fliway-ipo-priced-at-1-20-in-bookbuild-bottom-of-bookbuild-range-people-say.html

Looks like just me and Duncan's mum bought some shares :)

At this bottom end, I think this little company is good value. Seems I'm in the minority here with this opinion though.
I might get some more.

[Beagle]

I'm not surprised by this being at the bottom end of the price range and the fact that they allocated below the minimum stated amount they wanted too speaks for itself.

[GoldenStag]

Fliway just released a press release here:

http://www.scoop.co.nz/stories/BU1503/S00639/fliway-successfully-concludes-bookbuild.htm

According to Fliway it was a resounding success. They might have a slight bias though. :p

[RGR367]

Fliway just released a press release here:

http://www.scoop.co.nz/stories/BU1503/S00639/fliway-successfully-concludes-bookbuild.htm

According to Fliway it was a resounding success. They might have a slight bias though. :p

The way I understood it is that the "bookbuilding" was a success. This got nothing to do yet with the investors coming in. I'll just wait for my ASB to tell me so. And by then, I will know that this is really a puppy when ASB is involved. :cool:


Disc No intention too of getting into this. The business type is just to crowded.

[GoldenStag]

Fliway listing tomorrow.
Anyone know what time?

"Fliway’s final Offer price implies a market capitalisation of $54.5 million, reflecting a P/E multiple of 12.0x and prospective gross dividend yield of 8.1% for the forecast 12 month period to 31 December 2015"

I like the divvie.

[sharp]

Fliway listing tomorrow.
Anyone know what time?

"Fliway’s final Offer price implies a market capitalisation of $54.5 million, reflecting a P/E multiple of 12.0x and prospective gross dividend yield of 8.1% for the forecast 12 month period to 31 December 2015"

I like the divvie.

Profits will get better with the decreasing oil price.

[Beagle]

The way I understood it is that the "bookbuilding" was a success. This got nothing to do yet with the investors coming in. I'll just wait for my ASB to tell me so. And by then, I will know that this is really a puppy when ASB is involved. :cool:


Disc No intention too of getting into this. The business type is just to crowded.

Agreed. Disc. Recently sold out of MFT, growth is slowing in this sector. I see they listed at a tiny premium to the IPO price...what a surprise, (NOT).
Pretty sure a certain broker will support the price for a while to be seen to avoid lots of egg on their face.

[sb9]

Agreed. Disc. Recently sold out of MFT, growth is slowing in this sector. I see they listed at a tiny premium to the IPO price...what a surprise, (NOT).
Pretty sure a certain broker will support the price for a while to be seen to avoid lots of egg on their face.

Not for very long though...4c below issue price now, i'm sure we'll see below $1 soon...

[Beagle]

Not for very long though...4c below issue price now, i'm sure we'll see below $1 soon...

I think you could well be right mate. Very tough to see them making any meaningful traction northwards from the IPO price that's for sure.
Well you'd have to assume that there is a lot of stock overhang and a lot of scrip that never found a proper home despite raising less than the minimum quantity the promoters said they wanted and right at the bottom of the indicated price range. I can't help myself speculating what percentage of the shares found their way into Forbar's client's portfolio's for whom they had full discretionary management and how many are left in their own trading account ?
What a resounding flop this turned out to be....bet the promoters / Forbar's communications managers are in absolute overdrive trying to work out how to put a positive spin on this.

[GoldenStag]

I wouldn't be so sure about this one. The 8% dividend will bring in the investors. The bid depth has established now which is good (only tumbleweeds for a while there). I bought some more today.

Though I agree that the $600K chunk of stag money sitting in the asks between 1.20 and 1.22 is going to take a few days to get rid of. Naughty stags ruining the party :-)

[Harvey Specter]

I wouldn't be so sure about this one. The 8% dividend will bring in the investors. It will eventually get support. Look at Airworks. The problem is it is currently held by those who dont want to long term hold.

[Beagle]

Roger bet the promoters / Forbar's communications managers are in absolute overdrive trying to work out how to put a positive spin on this.

They didn't disappoint. Only an extremely creative and well paid spin doctor could call this float a success...

https://nzx.com/companies/FLI/announcements/262917

P.S...All the 116 bids just got drilled out.

[Snow Leopard]

...Only an extremely creative and well paid spin doctor could call this float a success...

Well, at the end of the day I am in profit on it :p.

Best Wishes
Paper Tiger

Disc: hold some.

[Beagle]

Realised profit or one of those phantom paper profits you hope you can realise one day ? :p

[GoldenStag]

the $600K chunk of stag money sitting in the asks between 1.20 and 1.22 is going to take a few days to get rid of.

Seems this statement might be true. Most of the volume being sold off is coming out of this stag pile in the 120-122 range. It is decreasing as the stags sell out. The range now only has $480K in it.

[tim23]

I hardly think selling @ $1.20 to $1.22 is a stag as such, a stag I thin implies a profit by time you pay brokerage theres nothing in it!

[GoldenStag]

I hardly think selling @ $1.20 to $1.22 is a stag as such, a stag I thin implies a profit by time you pay brokerage theres nothing in it!

Probably better put then as "The 120 -122 is littered with the debris of stag dreams". These are the would-be stags that didn't get what they wanted and will now overhang the share until they all sell out, either at a loss, or at a price that covers their costs.

Despite my name, I'm keen to flush these ones out and see what the share really trades like afterwards.

If Duncan and his guys have any PR gumption they will have held back a media release for a sign on of a big-ish customer to release a month or so after the float. They haven't shown any of that to date, but I'll keep my eye out.

[tim23]

I'm looking to buy next week under issue price okay by me.

[jetski1999]

i didn't see any of the executive SH notices i.e the 2 mentioned in the prospectus or the CFO
Did they not buy any in the iPO?
do they need to lodge SH notices? i would have thought so
if they haven't brought in why?
I have been watching this one with the view of buying but the questions above give me an uneasy feeling for this one

[tim23]

I thought they retained a decent share post ipo 54%?

[jetski1999]

no I am asking about the guys in section 7.2 of the prospectus Jim. Sybertsma, CFO, Cameron Mckewon GM domestic and Gavin satchel GM International.
the two directors show holding 20000 shares each not sure if gifted or payed for.
my questions is did these guys buy in. the reason I ask is further on in the prospectus it mentions client retention is due to the relationships these guys have with long standing clients.
if they haven't brought in Why?
what do they know that the rest of us dont

[GoldenStag]

Today has been looking like a Mexican standoff. All the bidders looking for a below IPO price bargain versus all the failed stags looking to exit at a cost covering price. No one wants to crack. Only one trade went through so far which was a buy.

It would be good to see some real investors come into the share. I believe the IPO price is okay, so with everyone holding out for a super cheap price, the stag pile isn't clearing.

I could be talking my book though...

Only two ways this share could go. It is a game of two halves. etc etc.

[tim23]

The 1 trade was a buy and a sell!

[GoldenStag]

Ha! I mean it was someone crossing the spread and buying from the ask side i.e. a buy.

[tim23]

Anyone been buying dipped in today @ $1.16

[jetski1999]

looks like someone selling out, must have given up on waiting for price to rise and taken the loss and moved on




Trade No.
Time
Price
Volume
Value
Conditions


1
17
5:00:23 pm
116
5,000
$5,800



2
16
5:00:23 pm
116
33,594
$38,969



3
15
4:44:42 pm
116
11,406
$13,231



4
14
4:44:42 pm
116
5,000
$5,800



5
13
4:44:42 pm
116
7,500
$8,700



6
12
4:44:42 pm
116
407
$472



7
11
4:44:42 pm
116
10,000
$11,600



8
10
4:44:42 pm
116
20,000
$23,200



9
9
4:44:42 pm
116
17,500
$20,300



10
8
4:44:42 pm
116
1,400
$1,624

[GoldenStag]

Buying at 1.16 makes the forecast dividend 8.4%!
I'm happy with the price all the way to $1.30, so I think someone just got a bargain at $1.16.

[TheHunter]

Buying at 1.16 makes the forecast dividend 8.4%!.

As the Hunter likes his stags... I'm quite keen to hear your thoughts on their forecasted financials?

Disc: Scouting for the right opportunity, yet to decide on the target.

[GoldenStag]

I am calculating on their 12M DEC 2015F value of 8.1% @ 120.
Here: http://www.fliway.co.nz/media/1023/fliway_group_offer_price_announcement.pdf

This is 8.4% @ 116.
The first dividend is in September, so not too long to go.

[tim23]

Firmed a bit today hopeful $1.16 may have been the bottom - usually when I buy the price drops!

[jetski1999]

i will wait for some news or this years results before I buy in,
still in two minds as to which way it will go.

all I have been able to find is negative stories they don't seem to promote themselves or there successes

news of getting a truck stuck,
http://www.stuff.co.nz/manawatu-standard/news/10164543/Truck-too-tall-for-skywalk
a driver getting hurt
http://www.stuff.co.nz/national/316660/Paralysed-by-400kg-of-falling-boxes
and a story about handling damage
http://tvnz.co.nz/fair-go/wednesday-august-29-5051954

[tim23]

I thought the Fair Go story recently was okay the management handled themselves well, I guess if you have a few trucks on the road a few mishaps will occur - the person who never did anything never made a mistake!

[jetski1999]

I agree with that many trucks on the road there will be mishaps. But I'm surprised I can't find any positive stories I.e fliway secured huge client or fliway expanding warehousing . There iPo didn't even register on the transport intelligence website who monitor all freight cos.
Hence my reluctance to invest in this one even though it could be another main freight or toll

[tim23]

Good to hear Dino - do you know the guy who fronted on Fair Go - I thought he was impressive.

[GoldenStag]

So, the Fliway IPO fact sheet puts the gross dividend at 8.1% based on the $1.20 IPO price. Now that the share price has fallen to 97 cents, does this then imply a 10.02% gross dividend for the year?

If the FLI guys can live up to their forecasts, then surely this little share is being overlooked?

Disc: hold shares from the 1.20 price...

[Beagle]

Correct but why anyone would bother with this pup is beyond my comprehension. (Chalks up yet another call he got right and considers changing user name to "Pup Patrol")

[tim23]

Wait till their result comes out - must be fun being so smart Roger?!

[Beagle]

Wait till their result comes out - must be fun being so smart Roger?!

If only picking the winners was as easy as picking the losers then it would be far more fun !!

[TheHunter]

Golden Stag - what was the forecasted cash dividend per share?

[GoldenStag]

The fact sheet is here...
http://eupdate.forsythbarr.co.nz/ch/38797/1hfvg/1901612/72276hs1f.pdf

Dunno about the cash dividend though.

[GoldenStag]

Wait... found it here in the investment statement...
http://eupdate.forsythbarr.co.nz/ch/38797/1hfvg/1901611/7227615c0d.pdf

It is forecast at 5.1% at $1.20 share price, so would be 6.3% at 97 cents share price.

[Beagle]

Wait... found it here in the investment statement...
http://eupdate.forsythbarr.co.nz/ch/38797/1hfvg/1901611/7227615c0d.pdf

It is forecast at 5.1% at $1.20 share price, so would be 6.3% at 97 cents share price.

GNE currently trading on (16 / 165) 9.7% net yield so its a little academic what yield something is trading at if the underlying business was floated at a price that was simply unrealistic in the first instance and probably still is given they need to prove they can grow, (talk means jack until they can consistently put some runs on the board). A Forbar float...need I say more...okay Feltex, Credit Sails e.t.c.

[Scooter]

Going to hurt today, ouch

[trader_jackson]

GNE currently trading on (16 / 165) 9.7% net yield so its a little academic what yield something is trading at if the underlying business was floated at a price that was simply unrealistic in the first instance and probably still is given they need to prove they can grow, (talk means jack until they can consistently put some runs on the board). A Forbar float...need I say more...okay Feltex, Credit Sails e.t.c.

I think Forbar's ARV float has been pretty good? ;)

But yes... this news is not good... and quite unexpected (I believe)... did they lose out to one of the big guys? and could there be more losses to follow? (and even if several small 'immaterial' losses were to occur... this would most likely mount up to a material loss...)
https://www.nzx.com/companies/FLI/announcements/283883

[benjitara]

Revenue down. You can go on about dividend yield all you like but there's only so much fat you can cut from operations. Good on them for their prudent approach given they seem to be struggling making head-way in this competitive industry. Hard to line up. Good for yield chasers.

[tim23]

This reminds me of Turners a few years back lost a big deal shares tanked but rebounded like the fact that CEO is not earning fat salary too.

[tim23]

12 month high happier holder

[Blendy]

Hi all, not much activity on this thread in a while - but I'll be at the AGM this morning and will post any interesting comments (and of course the morning tea for those interested!)

[Blendy]

Good summary of the excellent record results this year.

Strategy for the future includes expanding the business into markets not currently operating in, including acquisitions. (No explanation on acquisition opportunities yet)

[Blendy]

Interesting to note that Dick Smith situation negatively affected domestic results.

[Blendy]

Operational performance has hit new record high levels in the domestic sector.

International has dropped, but competitive market. New GM in this space and positive outlook for the next year.

JV with UPS is working really well. Also includes a $750000 dividend from them.

[Blendy]

Future plans for growth:
Revenue will be softer due to customer loss announced in June plus Dick Smith.

Generally though efficiency is good to help mitigate this.

Building on new and existing customers to continue growth.

[Blendy]

Query about acquisitions:
Will be with NZ rather than international. The Board is now turning focus to look at acquisitions when they are presented.

[Blendy]

Potentially the dividend strategy could be to reduce dividend payments to allow funds for acquisitions, unless there are no acquisitions and therefore div payout could remain the same next year.

[Blendy]

Dick Smith: $104000 suffered in the liquidation. However the bigger problem is the loss of a large customer for 20+ years. How to find a replacement customer is a challenge.

[Blendy]

Home delivery service after hours is a growing market for online purchases. (Actually I've noticed My Food Bag deliveries are often in Fliway vans on a Sunday afternoon)

[Blendy]

Looking potentially at adding another Board member to deal with acquisitions, and ideally that person would add diversity (gender, ethnicity etc)

[Blendy]

Very nice morning tea - the meeting was at the Link offices in the Deloittes building so it's been catered by a city caterer. Fancy sausage rolls, fancy sandwiches and mini croissants. A++

[Joshuatree]

Thanks Blendy.S/P and volume flat in response atp..

[benjitara]

I've got to say driving around Christchurch the Fliway vans and trucks would have to be the worst looking vans on the roads. Most look like they're on their last legs and the company logo/ material covers are always dirty in appearance. Not the best look but then again they seem to be stagnating in other areas of their business too!

[tim23]

Good couple of days out of nowhere reasonable volume today too

[tim23]

Anyone else noticed a price spike out of nowhere?

[Under Surveillance]

Anyone else noticed a price spike out of nowhere?
Yes. Can't fathom it. Result being reported 25 August unlikely to support it.

[TheHunter]

Yang Kee getting a steal at a @$1.22, a shame the large proportion of shares still held by the family so will likely go ahead. Getting ripped off @ $1.22 in my opinion.

Short lived listing on NZX now selling to overseas holders.

Hmm.

[TheHunter]

Why even list @ $1.20 then sell out at $1.22. Earnings set to cover and so will SP. They are getting ripped.

Well played Yang.

[Beagle]

Over indulged ? rich kids pocketing the vast majority of the money to augment their already extremely comfortable lifestyle ? It'll have to make a really compelling case for itself on a valuation AND growth basis to tempt me. Disc Own MFT which has a long and highly credible track record and has earned its hard won reputation with a five year average EPS growth of 14% and therefore fully justifies its 2015 forward PE of 19 times earnings. I wonder what this newcomers average EPS growth has been over the last 5 years ? "Best of Breed regardless of price" Warren Buffett.
Forsyth Barr managing the issue...Hmmmm, who can forget Credit Sails, Feltex, South Canterbury Finance ?

Yeap, its been a "fantastic" success story...for the promotors, (this post from March 2015). Considering the gains in the NZX over the last 31 months a 2 cent gain on the float price on a takeover is really very pathetic and shareholders have every right to think they're the ones that have been taken for a ride, (not the freight itself).

It was always a third rate listing in my view and that post above was by no means my only one clearly articulating the opinion I hold. I made it clear I preferred MFT which I said at the time was worth $22.50 and note it has increased from ~ $15.50 at the time to $24.80 now, a 60% capital gain whereas Fliway shareholders get Jack.

[TheHunter]

Yeap, its been a "fantastic" success story...for the promotors, (this post from March 2015). Considering the gains in the NZX over the last 31 months a 2 cent gain on the float price on a takeover is really very pathetic and shareholders have every right to think they're the ones that have been taken for a ride, (not the freight itself).

It was always a third rate listing in my view and that post above was by no means my only one clearly articulating the opinion I hold. I made it clear I preferred MFT which I said at the time was worth $22.50 and note it has increased from ~ $15.50 at the time to $24.80 now, a 60% capital gain whereas Fliway shareholders get Jack.


EPS set to recover in FY18 which would see the SP exceed $1.22... holders should be furious with this offer.

[Beagle]

EPS set to recover in FY18 which would see the SP exceed $1.22... holders should be furious with this offer.

Another Forsyth Barr "success" story. I doubt anyone will kick up too much fuss. Family interests control the play at Fliway and probably want more money out to go out and buy the latest 75 foot Riviera motor launch at $A9m. Rich "Kids" need new toys didn't you know ? Should never have been listed in my view...

[minimoke]

Another Forsyth Barr "success" story.
I remain amazed how these guys keep on doing this. There's some proverb about the "greater fool" or a "sucker born every minute" but i cant recall the detail

[TheHunter]

Another Forsyth Barr "success" story. I doubt anyone will kick up too much fuss. Family interests control the play at Fliway and probably want more money out to go out and buy the latest 75 foot Riviera motor launch at $A9m. Rich "Kids" need new toys didn't you know ? Should never have been listed in my view...

Yep, and the family missing out the most at $1.22, or perhaps theres some other incentive...

[beetills]

I wonder if Mike the bro in law had shares.

[Beagle]

Yep, and the family missing out the most at $1.22, or perhaps theres some other incentive...

I hear what you are implying BUT on the other hand considering their extremely chequered track record maybe a PE on last years earnings of 14.2 is all they're worth, (at least under current management) ? Talk of a recovery is just that, Talk, until its proven...anyone can "talk" about things getting better, the question is how much credibility does one ascribe to such talk ?

[TheHunter]

I hear what you are implying BUT on the other hand considering their extremely chequered track record maybe a PE on last years earnings of 14.2 is all they're worth, (at least under current management) ? Talk of a recovery is just that, Talk, until its proven...anyone can "talk" about things getting better, the question is how much credibility does one ascribe to such talk ?

FY18 should easily be 11cps, conservatively.