Feltex (FTX) - All over for shareholders

[winner69]

At what price is this a bargain enigma

Some would say todays 69 cents is ... a market cap of around $100M

About 10 years ago management bought it for $20M and then they borrowed heaps and paid $160M odd for Shaws (FTX is now really a Australian company)

Probably a bargain today but with plenty of downside risk associated with it in the near future. Negative cash flows, huge working capital levls, high debt are not good.

If they got there act together worth more than $2 but history of Feltex, Shaws and current management would suggest this is a big ask.

Rationalisation could be likely but would FTX be a leader in this. I think not but more likely a takeover target than an acquiror (unless shareholdrrs were asked to front up with heaps). So this could put a foundation under the price.

For those willing to have a punt go ahead, hard to see much more downside ... unless they go broke

For the value investor don't you want a company who can consistently deliver good performance. i wouldn't see it a good buy for those type of investors ... there are many others out there.

Beter than average returns are achieved if you can get future value cheap. FTX might be cheap but is there any decent future value to be obtained without taking excessive risk.

At this stage of the current economic cycle and in view of their bad financial performance i would wait a bit longer before looking at as an 'investor'

However in the meantime it is getting to the stage where some profitable short medium term trades might be around athe corner

Thats my rave for today

[trendy]

I wonder if they will borrow more funds to support the current div per share that's now yielding 17% [xx(]

[winner69]

And still the selling continues .. on pretty high volumes .... and down to 65 cents

Wonder where it will end?

[Lizard]

quote:Originally posted by winner69

And still the selling continues .. on pretty high volumes .... and down to 65 cents

Wonder where it will end?


Renounceable, non-transferable 1:1 rights issue at 30cps...???

(Sorry. Bad joke. Of course they wouldn't be able to get an underwriter now.)

[The Doctor]

asset backing reportedly...42c....so realistically about 25c would be a good level to get 'involved'! ;)

[Lizard]

quote:Originally posted by The Doctor

asset backing reportedly...42c....so realistically about 25c would be a good level to get 'involved'! ;)


In my experience, the only time that the price you pay for shares becomes completely irrelevant is when they end up worthless...

[The Doctor]

it would be a good takeover for Cavalier at the right price!

[TerryA]

Doctor,

Second opinion might be needed in view of what is happening to the Cavalier SP.

[The BOWMAN]

What would the price be if situations are not getting better and all four quarters of a year has a profit of -0.9M [?][?][?][?]
Maybe even 25C would look silly enough[?][}:)]

[winner69]

Now that would be a problem wouldn't it ... but not one beyond the bounds of possiblity

Probably have enough to pay the interest bill to the bank ... but jeez i just remmbered they have $16M capex commitments this year and $8M of it relates to the second half of the year

I wonder where the cash is going to come from ... maybe sell off some of that mountain of carpet they have stored away somewhere ... not too cheap i hope as Sam is committed to improving margins isn't he

Dividends don't look too likely for a while

But then the share price had an up day on friday ... a good Friday on Wall St ... the worlds problems are all over ... so FTX on the way up i think

[winner69]

Told you the worlds problems are all over and it is all blue sky for FTX

Could possibly be the best performer on the NZX over the next six months ...

[Snow Leopard]

but on the other paw, it may rain.

[winner69]

So Sam ' ....feels there is a lack of understanding, particularly among smaller shareholders, about the nature of the company today.'

Come on Sam .. it wasn't that long ago you received heaps for promoting Feltex as an 'iconic New Zealand' company and now you are trying to convince those small NZ shareholders who listened to you, Forbar et all that Feltex is essentially an Australia company.


Never mind ... some recognised this and saw the writing on the wall before your management team did and avoided this fiasco.

Ironic (but sad on reflection for many small shareholders anf even for Hunter Hall) the book value of this company is only $90M odd (61 cents a share) and it was dressed up to look like a $250M company.

Over time companies are only worth more than their book value if they consistently add economic value. At current shareprice of 69 cents the market is saying this will happen to some degree but little confidence is being shown that they can actually achieve this.

Good story though and should give some solace to those who have lost more than half of their capital ... good to see the PR machine in operation but the photo could have been a bit more flattering ... but after a tough few weeks well ....
http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10125412

Winner69 anybody counting on the carpet market in Australia were not thinking of the free trade agreement with America where the rising Australian dollar and the tariffs coming off American carpets from the competitive position they were in before all this happened. No wonder a private capital company vendor wanted to sell it. Seems to me people only see the benefits of free trade agreements never the detriments. This applies especially to Politicians in my opinion.

[winner69]

Yippee yipee wow wow ... this is great news

Consumer confidence (in Aust) rose 9.5 per cent this month, according to the latest Westpac-Melbourne Institute consumer sentiment survey

Feltex say this a lead indicator of future performance ... now for the good times now the consumer confidence is out of the equation

[TGT05]

Anything new from Feltex. When relsults expected???

[winner69]

Long long wait mate .... nothing planned until late August unless they have even more bad news ... or maybe a big upside surprise

What do toy think will happen to the shareprice in the meantime?

[Snow Leopard]

FTX has now been on the market for one year. From $1.70 to $0.66 in that time leaving a lot of people seriously out of pocket (I got out but not soon enough) and the ripples are still spreading.
Looks to me that at the moment the SP is in a gentle decline on moderate turnover.

An unloved share.

[Sky Tower]

I was also "lucky" enough to get an allocation. Got out at $1.69, fe;lt bit miserable at the time. Doesn't seem so bad now.

Everyone thought I was crazy getting out at that level - they said I should hold for the long term

[Dazza]

aye to that, i brought at 1.70, only to ship out around the 150ish mark..
am VERY glad i did :D

[Lawso]

Guess I'm one of the lucky ones who actually made money out of FTX. As a holder of 10k of 10.25% bonds, I swopped them for 6192 ords @ 161.5c (after interest payments and a juicy $800 gross for early redemption). Sold out in February @ 168cps.

[Bling_Bling]

What will happent to this sick puppy when NZ signs free trade with China? Bye bye Feltex?

[winner69]

One of Feltex's market indicators is the great HIA Renovations Monitor.

Feltex use this report to forecast futyre demand so they make mountains of carpets for sales that dont eventuate and then use the report to jsutify why the market has collapsed

So we are not surprised at a future date the latest HIA renovations Monitor is here
http://economics.hia.asn.au/media/National_Mar05.pdf

Summary - activated recovered to some extent in the March quarter but compared to 12 months ago was down 24%

Oh ****e ... just as I thought the market might be picking up for them the HIA has given them an excuse to come up with another downgrade.

[winner69]

More bad news ... and Sam is on his way

And this is a surprise - (quote)The Board and I are only too aware that this announcement will be a disappointment to investors. says Chairman Tim Saunders

[winner69]

quote:Originally posted by belgarion

Someone is accumlating but I know not who.

Might take punt (and it would be!) if we get to 60


Even cheaper today mate

[kura]

I suppose the only good news of todays announcement, was that most of posters here expected it.

[Westie]

quote:I suppose the only good news of todays announcement, was that most of posters here expected it.

Yes, good work & thank you to winner69 & all others that have been warning others about FTX & its problems.

[Dazza]

sit down sam! down sam!

hehe, 50 cents :D g-unit!!!

dayam, im feeling beta every day , that i got out of this dog!

[Noodle]

Glad I cashed out of this dog at great loss last week. Reinvested elsewhere for a 20 % gain already. I feel sorry for those that still hold their hard earned money on this one.

[Steve]

According to the NZ Herald, todays drop in the shareprice is due to Sam standing down. I would have thought that given the latest profit warning, the shareprice would have dropped further if Sam were NOT standing down...

Perhaps the journo missed the profit warning?![xx(] LOL!

Feltex shares plummet as market opens (http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10331676)
Shares in beleaguered carpetmaker Feltex dumped 30 per cent of their value this morning after it was announced the firm's chief executive, Sam Magill, would stand down this year.

Feltex said Mr Magill was to leave the company later this year and a full review of its operations was underway.

Investors angrily punished Feltex's shares, trading them down 21c to 70. A profit downgrade earlier this year saw the firm's shares plummet from 150c in late March.

Next you will have a takeover bid at 10 cents by one of these restructure merchants possibly the same one that sold it to you in an IPO.

[mentat]

soo at what price is this share worth buying, when is it a bargin, is its now share price an over-reaction and I should pick it up or is this share never worth backing? looking for a short term profit

Mentat at 1 cent as a shell company

[Lizard]

mentat, you need to wait the cycle out on this one. Wait for the company to stabilise earnings or you may find yourself caught in a capital raising which pares the value of your original shareholding.

Meanwhile, start checking carpet samples to re-carpet the house - within the month should be excellent specials on good quality wool carpets as FTX tries to dump that inventory and shore up cashflow.

[mentat]

thanks guys, at present I just hold CAH bought at 1.81, waiting for that positive announcement for their forestry sell off, then I'll sell off.

[TGT05]

Is there a scenario in which Feltex can get themsleves out of this s**t and if all went well what would it involve and how long would it take?? Any guesses?

[stephen]

Current price of high 40s compared with predicted earnings of 12m is a P/E of just under 7. Most of their current assets are in the form of inventory and goodwill! If you think that this was just one bad year and that things will get better, then maybe the time is right now, but I'd be waiting for the 20c mark myself.

Judging by the quality of management displayed this year you'd have to be a brave person to pick this up at more than what would be left when the debts are repaid and the carpet stocks sold up... which is going to be a lot less than 40c, I reckon. You could do better elsewhere, I'm sure.

[TGT05]

Hmm oh yea there's no way I'd touch the company again, I only bought it on the strong recommendation from my broker last year when I was brand new to the game. Oh well just deciding whether to cut some hefty losses or stick it out. The only positive out of all this is the lessons you learn along the way and better to lose when less capital invested than at a later date. :(

[Halebop]

Even the $12 millions are the "ghostly earnings of quarters past". Current annualised earnings appear closer to nil. They better hope commercial property activity doesn't drop off.

[foodee]

Wonder whether CAV or others may have a crack at them.

[kura]

TGT05, yep tough lesson, ( I learned the hard way too but not on FTx) learning to sell at a loss was the hardest thing of all for me to do.

Just a couple of points to add
1) $12M earnings was before restructuring type costs (no estimate of these given)
2) Would expect that goodwill will have to be written down/off their books under those new international type financial reporting rules.

[winner69]

quote:Originally posted by Halebop

Even the $12 millions are the "ghostly earnings of quarters past". Current annualised earnings appear closer to nil. They better hope commercial property activity doesn't drop off.


Right on mate - 3rd quarter a LOSS of $880K and now they say 4th quarter a profit of $200K (or $700K if you believe the positive side)

That's losing money in my books - halebop, good words when you describe the $12M as "ghostly earnings of quarters past"

And the future trading environment don't look too good either.

Strange as it may seem even breaking even would have been described as a good year by Feltex a few years ago

If i worked in one of their NZ plants I would be out looking for another job as there prob won't be a job for them by Christmas ... but places like Feilding, Dannevirke and Foxton don't have too many places to move to.

Would I buy at 47 cents ... not until the full picture is known ... dollars to donuts it is the banks forcing the board to finally do something

And Sheppard on TV flicking through the shiny prospectus that persuaded thousands of NZers to take (an Australian operated) an iconic NZ company public looked a sad sight saying they are going to do something about that .... a bit late for for that I say

[winner69]

April Fools day downgraded H2 guidance by 60% plus

Two months ago indicated that Apr/May/Jun profit would be $4.2M (taking full year to $16M)

Now a 100% downgrade ... even that $4.2M has evaporated

Downgrades getting better ... wonder what the next one will be like

And there hasn't even been a recession yet

[Gryffyn]

Pulling up the carpet to reveal the floor? At what price will the risk be worth getting in do you think?

[lambton]

quote:Originally posted by TGT05

Hmm oh yea there's no way I'd touch the company again, I only bought it on the strong recommendation from my broker last year when I was brand new to the game. Oh well just deciding whether to cut some hefty losses or stick it out. The only positive out of all this is the lessons you learn along the way and better to lose when less capital invested than at a later date. :(


Lots more nasty stuff to come out is my guess. Dilution thru capital raising is inevitable. So NZX and Members will probably get a second crack at Mums & Dad's. TGT next time an NZX Member offers you something so so good, if its easy to get - run. If its hard to get maybe you could remind them that they owe you for Feltex and perhaps you'll be thrown a bone. But I wouldn't hold my breath because the rules of the game is certainly not one of enriching small investors. Must not trust broker talk.[}:)]

[Lizard]

Winner69 - time to redo that Altman-Z score? By my calculation, they must be down to around $50m NTA after that last dividend and allowing for restructuring costs. And debt must be up to around $125m?

I took a look a closer look at that 3rd quarter presentation last night - how has FTX been allowed to borrow an additional $25m in the past twelve months in order to pay dividends and increase working capital (as well as meet capital expenditure commitments)? Given this largely happened in a period where profits were meeting forecast, surely the need for this additional cash must have already been apparent within the company at the time of the IPO?

Aren't there some rules about this sort of thing somewhere, either in NZX requirements or commercial law?

[lambton]

This coy was set up to fail from day one. Agree heads should roll but they won't.

[Westie]

quote:soo at what price is this share worth buying, when is it a bargin, is its now share price an over-reaction and I should pick it up or is this share never worth backing? looking for a short term profit

In the short term there may be a bounce on the back of speculation of a takeover etc. But it is all speculation until something materializes. I don't mind cheap companies, but i'd be concerned about the ability of FTX to service its debt in the future, especially in a slowing sector. Interest coverage is 1.8x whereas say Cav is 16x (taken from asb aspect huntley). Note: they have a restructuring charge to come.


quote:Feltex warned that its strategic review was likely to result in a significant restructuring charge, to be announced in the next results. Any restructuring charge would include redundancy costs and write-offs of any plants that might be shut down.

Analysts said uncertainty about the size of that charge was behind the savage reaction to the second profit warning in three months.

"I got the impression from the announcement today that they're falling down off the cliff and they haven't nearly reached the bottom yet," one analyst said.



quote:
FELTEX CARPETS LIMITED GROUP COMPANY
JUNE 2004
$000
Debentures 2
Interest rate 6.49%
Term loan – bank 79,610
Interest rate 6.49%
Term advance - bank 5,000
Interest rate 6.70%
Term loan – other 1,606
Interest rate 6.20%
Secured bonds - 60,000
Interest rate - 10.25%
Finance lease 493
Interest rate 8.20%
Total borrowings 86,711
Total borrowings are classified as follows:
Non-current portion 85,969
Current portion 742
Total borrowings 86,711
Repayable as follows:
Less than 1 year 742
Between 1 – 2 years 780 832
Between 2 – 5 years 85,189
Over 5 years - 60,000
Total borrowings 86,711
Bank loans, commercial bills, bank overdrafts and other bank facilities provided by the ANZ Banking Group to the Group are
secured by way of a first mortgage over land and buildings of the Group, and by fixed and floating charges over the assets and
undertakings of the Group. The term loan of the Company's facility with the ANZ Banking Group expires on 1 July 2009; the term
advance expires on 1 July 2006.
The term loan – other, is secured by a charge over the respective plant.
The finance lease is secured by a charge over the leased asset.
Interest rates are based on the interest rates as at 30 June 2004 and incorporate the effect of the relevant derivative contracts.
Refer note 26 for the re-pricing analysis.

[warthog]

quote:Originally posted by lambton

This coy was set up to fail from day one. Agree heads should roll but they won't.


Well, head*S* maybe not but one head has gone already.

Got to love the spin - Magill deserves credit for realising he isn't the one to lead the company in the future. If private equity were to take this company in hand then Magill would be out the door before the cleaners left for the evening.

[Westie]

FTX's float reminded me of a quote from a book I read by one of wall streets more savvy operators


quote:Investment banker to CEO
"Your company has one of two choices - go bankrupt or go public"


Looks like going public might not help FTX in the end. Of course things are far from over yet. At this stage i'd say i'd happily invest with the Credit Suisse First Boston Asian Merchant Partners private equity fund, at least they knew what they were doing!

[Bling_Bling]

Can someone name the people behind the private equity firm that IPO this dog to the public so that we dont forget their names?

[Westie]

Credit Suisse First Boston Asian Merchant Partners private equity fund.

No point in being upset at them, they served their investors well & it was all there in the IPO document. People just didn't read it well enough, or failed to approach the ipo with the necessary suspicion. THe financials showed that FTX hadn't done well for some years. CSFB stated they would sell their entire lot. It was done in the middle of a boom period for ftx's sector. Ipo's aren't done to make the public rich.

[Bling_Bling]

quote:Originally posted by Westie

Credit Suisse First Boston Asian Merchant Partners private equity fund


Who are the people behind Asian Merchant Partners Private Equity Fund?

[Westie]

asian merchants & their partners :)

[lambton]

quote:Originally posted by Bling_Bling


quote:Originally posted by Westie

Credit Suisse First Boston Asian Merchant Partners private equity fund


Who are the people behind Asian Merchant Partners Private Equity Fund?


Page 105 of the IPO offer doc says the issuer was as above - but went on to outline that it was an "affiliate of Credit Suisse First Boston Private Equity, the "principal investing arm of Credit Suisse First Boston".
So I guess the answer is Credit Suisse First Boston.
Noted in purusing the doc that the since resigned Chairman Tim Saunders is a Director of NZX.
Well well well, not another hole in the ground.

[Dazza]

either way il remember credit suisse

[lambton]

quote:Originally posted by Dazza

either way il remember credit suisse


You got it

[winner69]

lambton .. Mr Tim is still the Chairman ... and is acting CEO until Sams replacement is found

Mr Tim has already been criticised about his workload ... look at his other directorships ... Contact etc etc

[Bling_Bling]

What will happen to this dog when NZ sgins a Free Trade Agreement with China? [xx(]


disc: Bling NOT a shareholder

[Lizard]

I didn't take up the FTX offer - I was mildly outraged by the offer document. Having said that, I think that you shouldn't have to read through the fine print on the accounting in these hefty documents and perform complex calculations to be sure of what you are getting. What would you say if your new car became un-roadworthy after one year and someone said "well it was all there in the mechanics manual..."?

The profit performance is disappointing and failure to meet projections might be excusable. The changes in the balance sheet seem more sinister and may yet prove to be the more costly to investors.

The repercussions of financial stress within Feltex could fall beyond their investors. I hope there will be enough moral outrage generated to make the issuers and promoters approach the next big IPO with more conservatism in their gearing, pricing and profit forecasts.

[winner69]

Notice how Feltex have 'broadened' their focus into "increasing sales in the premium and mid-value segments of the market"

Only made mention of the premium segment in earlier despatches

After premium and mid range I take it there is only the cheap part to go ... suppose it is better they sell what they can

[lambton]

quote:Originally posted by winner69

lambton .. Mr Tim is still the Chairman ... and is acting CEO until Sams replacement is found

Mr Tim has already been criticised about his workload ... look at his other directorships ... Contact etc etc


Sorry - I was sure he'd fallen on his sword.

[Halebop]

Lizard the reality is its the buyers' jobs to do due diligence (and this is as it should be). I doubt the prospectus contained any fraudulent statements. The vendor got what they could for it and that's their job.

There were a couple of financial commentators who sounded rather luke warm about the offer. This should have been warning enought to those not willing or able to read the fine print. There were so many fundamental aspects to signal that this was not the right company or timing. The technicals then reinforced this. The fates sent plenty of warning to steer people away...

Aside: Funny how quick the Australian press are to call the company a "New Zealand" carpet maker...

[Ed]

I received the prospectus too. There were 3 reasons not to invest here (i) the very skinny balance sheet, (ii) the projections of growth that assumed that the good times would go on forever, (iii) one of the directors raised a big red flag.

I know it sounds wise after the event, but these three things made this an absolute no go for me. My broker felt I was being rather unfair at the time. The lesson? Back yourself.

[Westie]

quote:Having said that, I think that you shouldn't have to read through the fine print on the accounting in these hefty documents and perform complex calculations to be sure of what you are getting. What would you say if your new car became un-roadworthy after one year and someone said "well it was all there in the mechanics manual..."?

I didn't do a single calculation or even need to look at the fine print to avoid. I just looked at the previous years performance in the offer doc, not the most recent. If you buy a car you get an LTSA report & check the past history of the car. Same thing here.


quote:the reality is its the buyers' jobs to do due diligence (and this is as it should be). I doubt the prospectus contained any fraudulent statements. The vendor got what they could for it and that's their job.

Halebop is completely correct. CSFB did a good job. You can't really blame Forsyth Barr who managed the float either. They are share salesmen, they make their money from commissions. The better they promote, the more they make. That is their job. If you don't know what the motivations/incentives are of the people you are dealing with, you didn't do your homework.

I've found the easiest way to determine what kind of deal you are getting is to ask what why the owner is selling & then watch what the insiders are doing closely.

[coge]

Don't think there is enough blood on the floor yet. More bad news & substantial restructuring required before I'll look at it.

[Lizard]

Halebop, why is it that in the sharemarket we are willing to accept the extreme view of "consumer protection" (i.e. it's up to the consumer to figure out whether they're getting what they pay for)? How much do you expect to have to understand the products provided to you by your dentist? your builder? your mechanic? For some reason, we seem to be much more complacent about fair trading when it comes to the sharemarket and products provided by our brokers....perhaps it's okay if others lose money because it makes our gains look better?

Do you say the mechanic is "only doing his job" if he makes more money for his company by fitting your car with cheap and inferior brake pads? Chances are the failure of those brake pads will affect more than just yourself and it is possible financial troubles at Feltex might impact on competitors, suppliers, creditors and customers. Sorry, I think it is too easy to be complacent because it is less trouble.

[Steve]

quote:Originally posted by Ed

(iii) one of the directors raised a big red flag.

Ed, Which of the directors did you see with the big red flag?

[K9]

quote:Originally posted by belgarion

Someone is accumlating but I know not who.

Might take punt (and it would be!) if we get to 60



:D:D:D

Who needed a prospectous to know this would be a dog you only had to look in a carpet store and read about the proposed Australian free trade Agreement with America. In NZ in 1994 I carpeted a house with American carpet for less than 25% of a NZ equivalent quality carpet and the the competition gets even cheaper why buy a NZ carpet company.

[Westie]

quote:Halebop, why is it that in the sharemarket we are willing to accept the extreme view of "consumer protection" (i.e. it's up to the consumer to figure out whether they're getting what they pay for)? How much do you expect to have to understand the products provided to you by your dentist? your builder? your mechanic? For some reason, we seem to be much more complacent about fair trading when it comes to the sharemarket and products provided by our brokers....perhaps it's okay if others lose money because it makes our gains look better?

The point here is, no one bought a product. People that bought shares in FTX bought into a business and businesses are subject to the vagaries of, well, doing business. No one can predict the future, & if you are asking for guarantees when buying a business, that is what you are asking for. If people hold their shares, who knows? the business might suddenly start doing well. NZ herald publish an article tomorrow with findings that having polished wooden floors in your home is hazardous to your health. That's business.

[Halebop]

quote:Originally posted by Lizard

Halebop, why is it that in the sharemarket we are willing to accept the extreme view of "consumer protection" (i.e. it's up to the consumer to figure out whether they're getting what they pay for)? How much do you expect to have to understand the products provided to you by your dentist? your builder? your mechanic? For some reason, we seem to be much more complacent about fair trading when it comes to the sharemarket and products provided by our brokers....perhaps it's okay if others lose money because it makes our gains look better?

Do you say the mechanic is "only doing his job" if he makes more money for his company by fitting your car with cheap and inferior brake pads? Chances are the failure of those brake pads will affect more than just yourself and it is possible financial troubles at Feltex might impact on competitors, suppliers, creditors and customers. Sorry, I think it is too easy to be complacent because it is less trouble.

Operating a business and selling an asset are very differnt disciplines. The law understands this and sets up different rule sets for them. If you sell a house at auction and a heated bidding war ensues are you going to turn down an offer because it was $50,000 more than you had the house valued at? Whose fault is it that they overpaid for the house in an adrenalin charged moment of euphoria? If later you find out the house was in an area rezoned to commercial use and is now worth $200,000 more than you sold whose fault is it for selling too cheaply? These are just (sometimes sad but) necessary consequences of commerce and investment.

A private equity outfit getting a better price than the asset deserved is simply their good fortune (and product of timing and PR). However you mentioned products provided by brokers and this is not the same thing.

A broker has a relationship with the money (the private client and institutional investors) and the product (the company the vendor is trying to offload). As an investment banker or lead underwriter it is their job to secure a high price for the asset in a short time frame and orderly manner. As a private client advisor and so called "full service" broker its their job to provide balanced and timely advice and appropriately cater to the needs and desires of individual investor clients.

On this basis I've previously questioned Forbar's role as underwriter and client advisor on this very deal. In a generic sense I've also wondered how broker research is so often aligned with their pipeline of floats and underwriting obligations? My assumption is that brokers are bought by following the money and therefore from a private client perspective the model is flawed and not likely to meet my needs.

Not that it affects me but I'd be quite happy to see better proof of the so called "Chinese Walls"* or some sort of insulation between research, client advice and underwriting/investment banking deals. I don't however think legislation is the answer because all too often enforcing rules results in the opposite of the intention. I do wonder though if there isn't a niche to be exploited by a financial services company that can clearly demonstrate it never underwrites or "brokers" a float or some other methodology by which it can prove independance? I'm guessing that in a bull market these niceties are forgotten or overlooked by neophyte investors and the greedy.

...But as for the vendors - if they can find suckers to buy their offer good luck to them.

* Chinese Walls are a bunch of bollox. At best in organisations I've worked for I heard from colleages working on project X "look I shouldn't tell you this but...". At worst information is freely available - after all as an outsider I still hear "Look I shouldn't tell you this but..."

[Longtack]

Westie Posted - 21/06/2005 : 4:53:31 PM

NZ herald publish an article tomorrow with findings that having polished wooden floors in your home is hazardous to your health. That's business.

That's a blo+ody tragedy - so's breathing in dust mite faeces, and for that matter so's breathing and crossing the street - what next for this pus+syfied nation of whimps and blamers. Come in Cap';)

Belgarion you can still buy American Carpets. Most advertised in Queensland are synthetic. Australian carpets made with NZ wool get eaten here. I do not know how NZ made ones stand up here. And only small areas of most houses are carpeted. Carpet purchased in NZ was 80/20 comercial carpet with heavy duty comercial stair rating Cost $23.00 per metre. Nothing NZ made like it available even at $150.00 per metre

[Dough Boy]

I puzzled as to why there is 17 pages of drival on such a company.

I will say my respects now and watch it return to the earth.

[K9]

quote:Originally posted by belgarion

Toe in the water as at today ... [:I][}:)]

ENIGMA, In 1994 the US had a textile industry ... do they still? ;)


A day before...20/6
And the wording of the annoncement makes me as suspicious as hell ... I'll wait for the auditted results. Chicken I may be stupid I'm not. Mind you, a little flutter tomorrow might be an idea ...
Edited:
"Little flutter tomoorow"? Irrational post on my part. With i-rates returning 8-10% plus with little risk and the market overvaluing many stocks (IMHO) AND with FTX being a very dodgy dog ... Why bother? I like sleep and while I like risk too ... the top of a market is NOT, repeat NOT the time to do it. Money stays as cash and near cash.
Watching and learning is the name of the game with this very naughty puppy. A time will come but it ain't now.





Authur, Martha or Belgarion? who would know, confused little clod.

[badger]

I wouldn't touch this pig of a stock just yet. The history of these things is they generally get worse before getting better, culminating in a deeply discounted rights issue to help restore a debt laden balance sheet.

Feltex could get into some real strife yet ala NZ Rail.

[rawdata]

This company can go broke - that's the clear and present danger.

Work through the numbers and it is looking rather frightening.

[winner69]

Great stuff ... all this free publicity

Anger over Feltex 'fiasco'
Mr Tim needs to go ... Mums and Dad screwed ...
http://www.stuff.co.nz/stuff/0,2106,3321123a13,00.html


Feltex 'talking nonsense' over slump in sales
... Feltex's problem was it was making "me-too" carpets. ... They used to be market leaders but they have lost the plot.
http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10331999

Winner 69 when I was a child it used to be a sign of cheapskates to have Feltex carpet. It was just rubbish.

[craic]

For two years, between 1961 and 1963, I spun wool for Riccarton Carpets (Feltex) on the night shift from midnight to eight in the morning. Myself and a fellow named Frank Hussey worked either side of a huge doubling frame that came from the North of England. We were paid a bonus. For every hours production (about 50 lbs of wool) that we produced extra in a shift we got an extra hours wage, seven shillings. Both Frank and I regularly produced an extra eight hours of wool in a shift and doubled our wages. For us we got through a nights work in a flash and for the firm - they got an extra mans work each for no overheads and the figures were based on an experienced spinners production in Bradford. We NEVER had sickies and the union delegate used to have to chase us off the machine at smoko and lunch. One day a little man in a white coat with a board and a stopwatch came and stood by our machine. We had to keep kicking him out of the way and eventually aftere two shifts, he went. A few days later we were told that we were being paid too much and given a new rate of bonus that would yield the price of a packet of cigarettes per night for the same amount of skill and efforts. I moved on immediatly.
It seems to me that the same management remains in Felt and Textiles and I am happy to say that I have never owned a share in the company.

[hesiod]

Would even GPG take a punt on this mobile catastrophe ?

[Lawso]

I don't know how many bondholders there were, belg, but I was certainly one of them. Swapped $10k worth of 10.25% bonds for 6192 shares @ 161.5cps, sold out ten months later @ 168cps[^] It's shocking to realise that the s p was around 170 as recently as last February.

PS. your post asking about the number of bondholders seems to have disappeared[?]

[dingdong]

quote:Originally posted by ENIGMA

Winner 69 when I was a child it used to be a sign of cheapskates to have Feltex carpet. It was just rubbish.


O Disco Stu I didn't realise Feltex had been round for over 100 years.

[Lizard]

Belgarion, hate to dampen your enthusiasm, but how many Feltex investors will be in a hurry to hand over more cash to Feltex in a rights issue? And who would choose to underwrite such an issue? Whether they prop it up with a rights issue or with Private Equity, it can only be at a deep discount to the current share price, which will reduce the value of existing shares. Think AIR. Think ION. Did investors who bought prior to (and invested in) the rights issue make a profit?

[K9]

The dog has his eye on you...

"off to see the bank manager and unlock some cash."


very strange..I have it in my account ready to go online?


you have to
1. See a bank manager?
2. unlock it?


:D:D:D

PS. Is this strategy like your one on TWR or AIR more recently[xx(]

Like loosing 20% on AIR in 6 months...like to update us;):D
How about making 80% on TWR when your average was $2.09???

I see you`re down 11.5% already from your first FTX buys

I`ll be watching you alright.[^]



you see, when I call it right after a rights issue, I get it right like RPL.

[K9]

oh me, I`m at the Bank begging my bank manager to unlock my cash:D:D:D:D:D

LOL...


BTW, are you ok Belg? your face is looking awfully red[^]

and hows the AIR plan?;)

[Steve]

I have jumped in for a bit of a punt. Whether it be [^] or [:I], time will tell...

[tsb]

averaging down - but still at $0.88!!!
presumably they are well into take-over territory.
Would cavelier want to take them on?

[Chris]

Belg... you reckon these are going to bounce back mate?

ps.. on the canadian sites I use they have an ignore button on people like K(

[Lizard]

I don't think Cavalier would want them and it's unlikely CAV could do something of this size. GPG was mentioned earlier. I've been mulling that one, and they might be the one rope that would get investors out of this. They could go for 19.99% and a seat on the board then underwrite a recap of about $50m-$70m. Full takeover only if they didn't get cooperation.

CAV is a neat little business that typically trades on a price/Sales ratio of around 1.5, so that sets a very long term target of circa $3 per share (in the next building boom and properly capitalised, well-managed etc). So for GPG, buying in at 40-55cps and adding 40cps in capital (plus internal costs) might meet their hurdle rate.

Having said that, I wouldn't buy the shares to speculate on this happening. It is just as likely some Private Equity firm will be called in to shore up the balance sheet and walk off with half the company for doing so...

Lizard I do not think GPG would be that stupid as to buy FTX.

[craic]

Anyone know the Magill who got the push. There is a family around here in the retail carpet business since the flood. One in particular has a habit of starting major projects and fckuing up. Could it be the same people.

[limegreen]

Apparently an ocker, craic. So maybe not from round here?

[Krustytheclown]

I got a few of these a couple of days ago-for a trade of the short kind.....yet it did not look or feel good when I was holding and tipped them back onto the market the next day......very small loss.

I see that one of the major holders has halved their holdings over the last few days.....how will this be digested tomorrow???
Interesting to watch this one.....holding is very un-nerving.

Gregor.

[Bottom Feeder]

Hi,

I bought in at .43, not the 3,3% stake but a large purchase the same.

Rule of thumb - Float at 1.70 Profit halved shareprice will settle at
.85cents = 100 profit for me.

Simplistic you say, well if you get too technical and look too carefully at all the pitfalls, would you invest in the sharemarket at all?

[saintjohn]

Belgarion
You have been manipulating this thread all day, by your constant editing, to keep it at the top of the
Page. No amount of ramping on your part can have any significant effect.
This stock is now in the hands of the day-traders who may as yet have you for dinner. IMHO

As an aside, I’m a Kiwi , proud of our flag and our American friends, if I had my way you would be shot as a traitor or
better still beheaded in line with the practice of the people you support

[Longtack]

Careful there SaintJohn - "Patriotism - the last refuge of a scoundrel.";)and shooting Belg' would make you a tyrant and very unAmerican [xx(] (Onanist.)

[saintjohn]

quote:Originally posted by belgarion


quote:

This stock is now in the hands of the day-traders who may as yet have you for dinner. IMHO

As an aside, I’m a Kiwi , proud of our flag and our American friends, if I had my way you would be shot as a traitor or
better still beheaded in line with the practice of the people you support



saintjohn,

You are a fool.

If one is in any doubt, one need only read your post.

Im sorry if you lost money on FTX. Im more sorry if you can't see that I want FTX to survive.

If you beleave that FTX fate is in the hands of the 'day traders', then you are doubly the fool. It is not. It is in the hands of people like me with cash in the bank who can hold up the shareprice and provide more cash when the rights issue is announced. If people like me don't buy at now, there will be no rights issue as noone will buy rights to shares above current value.

I seldom 'day trade' and I have cash waiting to help this company, as I did, AIR, TRH and TWR when rights issues were announced. With reagrds TRH and TWR, I was frequently a lone voice saying these companies were undervalued. Where was your voice? Licking your wounds and feeling sorry for yourself? Why aren't you telling people what they need to know about FTX. I have. I have rich friends. They are all aware and watching ... ready for the rights. What have you done?

Do the maths! Show the maths to the people! Get your cash ready for the rights issue.

You doubt my patriotism? Let me see you do the same!

You make me sick! :( (Can't say I mind tho, fools like you also make me richer. :))

Should you want to delete your post s.j. ... I will remove mine too.



Hell I'm just warming up! but an a apology first and your got it.

[saintjohn]

Belgarion

I have never held FTX but may in the future when the investigators have departed, and management announces a clear way forward.

My comments about Patriotism have nothing to do with FTX but your anti-American threads in the off topic section of ST (as if you didn’t know)

Until the mechanics are sorted, FTX like AIR NZ was pre consolidation will be a day-traders playground. Best of luck for jumping in early.
SJ

[K9]

quote:Originally posted by belgarion


quote:

This stock is now in the hands of the day-traders who may as yet have you for dinner. IMHO

As an aside, I’m a Kiwi , proud of our flag and our American friends, if I had my way you would be shot as a traitor or
better still beheaded in line with the practice of the people you support



saintjohn,

You are a fool.

If one is in any doubt, one need only read your post.

Im sorry if you lost money on FTX. Im more sorry if you can't see that I want FTX to survive.

If you beleave that FTX fate is in the hands of the 'day traders', then you are doubly the fool. It is not. It is in the hands of people like me with cash in the bank who can hold up the shareprice and provide more cash when the rights issue is announced. If people like me don't buy at now, there will be no rights issue as noone will buy rights to shares above current value.

I seldom 'day trade' and I have cash waiting to help this company, as I did, AIR, TRH and TWR when rights issues were announced. With reagrds TRH and TWR, I was frequently a lone voice saying these companies were undervalued. Where was your voice? Licking your wounds and feeling sorry for yourself? Why aren't you telling people what they need to know about FTX. I have. I have rich friends. They are all aware and watching ... ready for the rights. What have you done?

Do the maths! Show the maths to the people! Get your cash ready for the rights issue.

You doubt my patriotism? Let me see you do the same!

You make me sick! :( (Can't say I mind tho, fools like you also make me richer. :))

Should you want to delete your post s.j. ... I will remove mine too.


saved:D

[rmbbrave]

Share buy-up points to Feltex raider


25.06.05


The buzzards are hovering over troubled carpet-maker Feltex.

Feltex shares gained 4c to 48c yesterday after two institutional investors picked up large stakes - possibly on behalf of a corporate customer.

"There is some suggestion that it's a corporate raider and GPG springs to mind as a possibility," said ABN Amro broker Matt Willis.

"Clearly, someone sees value there - the ability to get in, help rationalise and strip out costs and put the thing back on a firm footing."

Feltex has taken a battering this week after disclosing its net profit for the June year will likely be half of the $23.9 million predicted in its listing prospectus. The company also announced the premature departure of chief executive Sam Magill.

Feltex shares plunged to a low of 39c on the news against a listing price of $1.70 in June last year.

They had a brief reprieve yesterday when institutional brokers entered the fray. Goldman Sachs JB Were picked up 1.5 million shares at 46.5c a share after the market closed on Thursday and UBS yesterday bought 5 million shares at 44c and 715,000 at 47c.

"There is speculation around the market that someone might be accumulating a stake," said Hamilton Hindin Greene partner Grant Williamson. "It is not out of the question that someone might get interested at such levels.

"The Feltex name has been around for a long time and there is certainly value there, but they are struggling and a corporate raider or competitor - someone in the industry - could be interested."

GPG director Tony Gibbs declined to comment on whether the company has its eye on Feltex.

"I am aware of the rumours, but we never confirm or deny we are in any stock," he said.

Williamson said it was unlikely Feltex's New Zealand competitor, Cavalier, would be interested, but it could attract a buyer from further afield.

Some analysts are still wary of the stock, cautioning that it may not have bottomed out yet.

- NZPA

[Steve]

I have had a passing thought that I should have sold out on Friday at 48c after buying in earlier in the week. Perhaps keeping some shares that cost the same as the profit, therefore retaining a holding that has not cost me anything.[?]

I note that broker estimates vary between 40c - 75c. I wonder if these are based on forecasts or projections?;)

[winner69]

On his return from his African safari Sam immediately went to see Hunter Hall and other investors in Aust to explain the April Fools day profit downgrade (NZ Herald late April)

Give Sam his due ... did a hell of a job convincing Hunter Hall things weren't too bad.

This is what Hunter hall wrote June 7th (thanks Belg for the link) -

Feltex has been cited by some advisors as an obviously overvalued stock which we should have avoided. I disagree.

At the float price of NZ$1.70 the shares offered a 7.9% yield supported by a cash generative business (free cash flow return on operating capital of 23%), experienced and motivated management (CEO Sam Magill owns shares worth $4m) and a credible strategy to raise margins and profitability.

Had this strategy been successfully implemented I was of the view that the share price would rise to about $3.40 over the next four years which when combined with an annual dividend of 13.5c offered total annual returns of 25%. In a market up 40% in two years this seemed to be a relatively good opportunity.

The table below shows my workings at float. It assumes a 3% annual increase in revenues and an increase in margins to 17% over four years. A major competitor of Feltex is Cavalier Corporation which generated a margin of 19% in 2004 so this margin target is not outlandish.

Because of low growth and overstocking (estimated at $15m at float) working capital requirements are low.

2005 2006 2007 2008
Starting net debt 94105 87185 76609 62985
Gross Cash flow 51683 53789 59096 64673
Working Capital -4251 -200 -200 -200
Stock reduction 3000 3000 3000 3000
Interest -7530 -5143 -4520 -3750
Tax -10676 -12870 -14752 -16770
Capex -8500 -8500 -9500 -9500
Dividends -16806 -19500 -19500 -19500
Retained Cash flow 6920 10576 13624 17,953
Ending net debt 87185 76609 62985 45032
Enterprise Value (10x FCF) $431,830 $452,890 $495,960 $551,730
Value of Equity $344,645 $376,281 $432,975 $506,698
Per share $2.30 $2.51 $2.89 $3.39


Until April 2005 things seemed to be broadly on track with the plan. Results released in February saw revenues down on forecast but profit, dividends and net debt better than forecast.

Then on April Fools Day the company announced that revenues would be up to 6.5% below forecast and net profits would be up to 38% below forecast. As a result the stock price has fallen nearly 60% - and if the company fails to meet its next target the shares could fall further.

I believe that Feltex’s problems are short term and are basically the result of a crack in consumer confidence occasioned by increased interest rates combined with increased expenses related to the move to higher margin products – new equipment, advertising, sample books etc.

Management could have massaged the numbers by
deferring expenditure but decided to stick to their plans.


Feltex is now selling at a ludicrous market cap of NZ$100m as compared with sales of about $300m and 2004 EBITDA of $46m (2003 EBITDA - $31m) - it has huge operating and financial leverage.

Net debt is currently $110m but should reduce substantially over the next three years. With forecast EBITDA of $30m in 2005 and $40m in 2006
the stock is selling at prospective EV/EBITDAs of 7.0x and 5.3x respectively. The company faces significant operating issues so we are being cautious about increasing our exposure. But it has significant upside potential.

So early June Hunter Hall contemplating increasing exposure

Last week must have the last straw --- wonder if Tim or Sam rang Hunter Hall ... if they did i bet they got told what to do with their ****ty company and pack of lies

Don't know if Hunter Hall have sold out completely but if they have the little foray into an iconic NZ brand cost them the best part of $16M ....

[winner69]

according to a NBR article FTX banking convenants are

- EBIT to interest cover no less than 2.5 times
- debt to ebitda of 3.5 or less
- shareholders funds no less than $65M

canned the dividend because it wouldd have breached the 2nd one

[Halebop]

quote:Originally posted by winner69

...A major competitor of Feltex is Cavalier Corporation which generated a margin of 19% in 2004 so this margin target is not outlandish...

This is a comparison trap that's easy to fall into and why qualitative measures can be beneficial. He compares his choice with a decidedly average track record to another company with quite a good track record. The trouble is average companies tend to stay average... ...but its only when the chips are down those quality differences become truly apparent.

Disc: Too dodgy for me.

[winner69]

quote:Originally posted by winner69

according to a NBR article FTX banking convenants are

- EBIT to interest cover no less than 2.5 times
- debt to ebitda of 3.5 or less
- shareholders funds no less than $65M

canned the dividend because it wouldd have breached the 2nd one




Last 6 months EBITDA about $6M-$7M and EBIT about $2M-$3M ... things not looking better for the next year so take a guess

Unless the mountain of carpet has been reduced (seeing making no money you have to say no) debt still over $100M

All this before any restructuring costs wjch will take a dent out of the current shareholders funds of about $90M .... and what was that bank convenant again?

Take a guess (or some forecasts or projections) at where they will be in a years time ... not a pretty picture I think ... and utterly amazing for a company that can sell $300M of stuff.

[winner69]

quote:Originally posted by belgarion

W69, what suprises me is how quickly they reversed their position. The took the hit on the nose whereas they could have hung around for a couple of years and probably done better than break ever. The, of course, Im assuming the have the cash to partake in a rights issue. Maybe they've had a run on funds and their cash position isn't that flash? Or maybe, being one of the major shareholders, they did a Blegie and got down on the ground and started asking questions and rooting out information? [}:)]

But, stirring aside, are you holding W69? Care to pick the rights ratio? ;)




Belg - Hunter Hall are pretty astute and any shortage of funds on their part not likely

I think they just had enough of listening to Feltex management and their lies, had a good look at the current state of the industry and saw little hope for Feltex in its present state and just took the hit and moved onto greener pastures. (May have kept some)

[winner69]

So Feltex are 'surprised' at what is happening in the industry, esp the impact of imports etc.

Excuses excuses etc

Here is what Feltex said to the Productivity Commission in Australia in March 2003 (bet you these comments didn't get into the prospectus)


FA (Feltex Australia PTY Ltd)is a large producer of wool carpet yarn and wool carpets, however about 80% of its production volume is producing carpets from manmade fibre (MMF).

FA believes that MMF sector of the carpet industry will face the greatest threat from the tariff reduction scheduled for 2005, and would be further adversely impacted by any additional tariff reduction after 2005. FA believes that carpet import volumes are sensitive to tariff change.

FA has the view that any increase in competition from imports of MMF carpets post 2005 will threaten the underlying economic viability of the Company, and could result in downsizing, plant closure, job losses and a decline in investor confidence for key stakeholders.


Hell .... more decline in investor confidence to come

[winner69]

One other thought that came to top of mind hearing Deputy Sherriff John raving on how he IS going to ensure labour reforms do happen and the quicker the better.

Knowing Australia will lead to industrial strife .... and didn't industrial action close Feltex plants in 2001 for a few months

[rmbbrave]

From the Sunday Star

Broker: We blew it on Feltex
26 June 2005
By GREG NINNESS and GARRY SHEERAN

Should brokers involved in floats also be touting the shares to clients? Investors ask the hard one after a share price went from $1.70 to 39c.


Sharebroker Forsyth Barr has admitted it was wrong in recommending Feltex Carpets to its clients.

"I'm not trying to excuse the fact that our recommendation has clearly been wrong," Forsyth Barr managing director Neil Paviour-Smith said.

The company played a leading role in the disastrous Feltex float, and many of its clients have suffered substantial losses as a result of its recommendations to buy shares in the company.

It was joint lead manager with First NZ Capital in last year's float and NZX listing, and was instrumental in the book building process which set the offer price at $1.70 a share. It also promoted Feltex shares as a "buy" through its weekly client newsletters.

Forsyth Barr clients own at least 16 million Feltex shares.

When Feltex announced the first of two major profit downgrades, on April 1, Forsyth Barr changed its recommendation to "accumulate," a position it maintained for three weeks until it changed again, to "hold."

AdvertisementAdvertisementThe Feltex share price collapsed this month, trading as low as 39c, when it was revealed that the company faced big trading difficulties. Chief executive Sam Magill is to leave by the end of the year.

While accepting that Forsyth Barr got it wrong, Paviour-Smith points the finger of blame back at Feltex.

"You are reliant on what you are told by the company," he said.

"When the company's telling you that everything's on track, it's a big call in a continuous disclosure world to go out and say 'That's clearly wrong, we'll forecast something different'.

"You rely on the quality of information you are given by the company.

"So when it turns out as in this case that the numbers that have been provided are so different to what's actually happening, then that's going to flow to your research and you'll get it wrong."

And Paviour-Smith said Forsyth Barr was not the only broker to get it wrong.

"If you look at our forecasts and valuations relative to other analysts, they're certainly in a similar ball park.

"I know that First NZ Capital, ABN Amro Craigs, Macquarie Equities and ourselves . . . I think the forecasts were pretty similar. There were slightly different valuations but they were all in a ball park range.

"And equally, I think they had the same sort of reliance (on information provided by Feltex)."

Macquarie Equities research director Arthur Lim agreed it was difficult for brokers to publish research which went against information from a subject company.

"Analysts do their own work independent of what the company says," he said. "But there is a sense in which you are damned if you do, and damned if you don't."

"You could do work and come up with your own forecasts, but if companies come up with their own guidance, they will be the ones that the market – institutions as well as retail investors – will listen to. Because who is really in a better position to give a view of how things are going than the company?

"Those who stick their necks out had better be right, because there are no prizes for being right and there is every punishment for being wrong. The company stops talking to you and the fund managers and investors think you are an absolute wally."

The affair has also raised investor concerns about the potential for conflicts of interest when broking firms become heavily involved with a company in a variety of roles.

"I think there can be potential for a very big conflict of interest if you are an adviser or lead manager and you also operate discretionary accounts which end up taking a huge slice of a new issue," said the head of a large funds management company.

"You have to wonder if that's appropriate, even if all goes well."

Paviour-Smith said the way Forsyth Barr dealt with such potential problems was "no

[rmbbrave]

An historical discussion is all very interesting but what we are really interested in now is whether the SP will rise over the next few days to few weeks and whether we can make some money trading FTX.

What are the chances of a takeover of FTX?

Does anyone else rate it a "speculative buy"?

[winner69]

IRG says its has a high dividend "The share has speculative appeal as the latest fall (in price) delivers a high dividend yield"

That'll attract some rmbrave

[winner69]

rmbrave asked ... Does anyone else rate it a "speculative buy"?

Speculate is about uncertainities and the situation around Feltex is very uncertain so buying FTX at the moment is very 'speculative', especially if you buy to make a gain.

The market is full of 'speculators' so there will be many making 'speculative' buys next week ... so the price will probably go up

Further down the track as some as the uncertainities become less uncertain the 'speculators' will know whether they made the right decision or not.

You have itchy fingers rmbrave ... so why not do a bit of short term 'speculating' ... could be gainful for you eh

Very profound on a cold Sunday ... whats your view anyway

[Steve]

Someone was collecting a few on Friday...

[Halebop]

Too scary for me W69. Even the worst company normally enjoys a bit of a bounce after such a big fall. I've still got plenty of cash sloshing around so I've certainly looked at it.

A couple of notables in the past few years have been TRH (nzx) and ALL (asx). TRH had lots of assets and really only seemed to have liquidity problems so I was willing to take a punt. ALL was a fallen star but its problems stemmed from a single transaction and the public stoush between its board and CEO - they weren't structural issues.

FTX in comparison is a pretty average company without the balance sheet wealth of TRH or the operational pedigree of ALL. While I concede there may well be a bounce to benefit from I think the rewards are out of proportion with the risks on this one.

[kura]

I recently looked at their interim accounts to 31/12/04, and must admit, they looked really quite good back then, you would think it was a different company from what we have today. If I were an analyst looking at those accounts, I'd be quite happy with them !

Would be interested to hear any opposite views, as reading those accounts, I sure couldn't detect the looming problems ahead.

[biker]

quote:[i]

From the Sunday Star


A report put out by independent research house IRG last week noted: "The share has speculative appeal as the latest fall (in price) delivers a high dividend yield.




With no final dividend and the unlikelihood of there being any future dividends under the current capital structure, what the f... is he on about?

[Steve]

quote:Originally posted by biker


quote:[i]

From the Sunday Star

A report put out by independent research house IRG last week noted: "The share has speculative appeal as the latest fall (in price) delivers a high dividend yield.


With no final dividend and the unlikelihood of there being any future dividends under the current capital structure, what the f... is he on about?


If I may quote Tim Preston of ASB Securities: "Good, attractively priced IPOs will go out the door. There is huge demand for them."

Hats off to the FTX vendors, they priced it right. Joe Public really has nobody to blame but themselves for getting into FTX, unless they were a client of joint-lead broker Forsyth Barr...;)

[winner69]

quote:Originally posted by kura

I recently looked at their interim accounts to 31/12/04, and must admit, they looked really quite good back then, you would think it was a different company from what we have today. If I were an analyst looking at those accounts, I'd be quite happy with them !

Would be interested to hear any opposite views, as reading those accounts, I sure couldn't detect the looming problems ahead.


It was the half year accounts that started the alarm bells ringing for me becasue the operating cash flow was negative (in spite of the much vaunted EBITDA result). After capex free cash flow a negative $10M. In addition borrowings blew out to more than $100M (up $20M over 6 months).

And the concerns all came to fruition when you see the March quarter results and balance sheet

So kura I didn't think the half year report was good at all ... but many analysts obviously believed the words and pretty pictures that came with the report

[The Doctor]

Preston from ASB would know!.....BBQ Factory!:D

[Bottom Feeder]

Our Dollar is about to drop. This will make their product more competitive on the Australian Market if they can retain a reasonable market share. The company at least is aware of their problems now and are addressing these. It may mean a smaller leaner company, which considering a share price of 50 cents or so, may still be good value, with a good chance of upside if the market for carpet improves.

[winner69]

quote:Originally posted by belgarion

If I could go one step further than W69 ...

No accounts published since IPO would make me go near this pup above 60c. ......


Belg, current book value is 60 centa a share .... before any restructuring writedowns or whatever.

Anything above 60 cents would be the NPV of future added value or economic profit. So to deserve a shareprice over 60 cents they would need to convince the market that they could consistently make more than $20M EBIT a year.

And they could convince Hunter Hall of that and when you read Belgs post above you can understand why ... the fixed expense base is far too high.

It is highly probable that most of the NZ operations will be closed with hundreds of jobs lost ... and Dannevirke, Foxton and Feilding are not easy places to find jobs for those affected.

Ironic really that iconic NZ brands will essentially end up being manufactured in Australia ... just as well they acquired that Shaws thing a few years ago

[lambton]

From the Sunday Star article I gleaned.
1) Forbars are blaming the coy for jacking up the figures. Is this the beginning of litigation. Someone is going to pay and Forbars must be at the front line with conflict of interest, breach of trust etc etc to explain away.
2) Phil Briggs drops a bundle on FTX - I remember him as the Equity Research guy. Interesting. Money was meant to go around after all. I think he did well out the business which he sold to Dorchester.

[Steve]

I got rid of last weeks purchase this morning @ 49c. In the end I decided against retaining my profit as "free" shares...

[Bottom Feeder]

Irrespective of the reasons behind their loss on FTX, Hunter Hall has bought high and sold low. As Belg mentioned above, they should have stuck it out and waited for the company to divest itself of the "Fat"

I cant see the price coming down much lower than it is at the moment.

Here's a lesson - Don't invest with Fund Managers.

[lambton]

quote:Originally posted by Bottom Feeder

Irrespective of the reasons behind their loss on FTX, Hunter Hall has bought high and sold low. As Belg mentioned above, they should have stuck it out and waited for the company to divest itself of the "Fat"

I cant see the price coming down much lower than it is at the moment.

Here's a lesson - Don't invest with Fund Managers.


Need for capital will mean one or more heavily discounted rights issues. Bit like FFS (Tenon). Not going near this dog until all of the air has been deflated. IMHO that's a long way away yet. All the best and if you have been lucky enough to strike real bottom then thats my lost opportunity.

[Caesius]

Good % rises over the last few business days. Any thoughts on whether people are getting back into FTX or is this what I remember having read about - a dead cat bounce?

[rmbbrave]

I bought 6500 this morning at .48 and put in a sell order at .51 not expecting them to sell but they did!

Profit $135.

[winner69]

quote:Originally posted by rmbbrave

I bought 6500 this morning at .48 and put in a sell order at .51 not expecting them to sell but they did!

Profit $135.


Should have waited a bit longer mate .... worth more in a few days I would say

[rmbbrave]

quote:Originally posted by winner69


quote:Originally posted by rmbbrave

I bought 6500 this morning at .48 and put in a sell order at .51 not expecting them to sell but they did!

Profit $135.


Should have waited a bit longer mate .... worth more in a few days I would say


Did you buy any?

If not, I reply "you should have bought some".

Trading shoddy companies is a risky business. I am happy I made a profit. I though the SP had a good chance of rising today but it could have easily fallen then I'd be looking stupid.

As it was I earned the average daily wage for a few minutes work. Ain't life grand!

[Caesius]

The most frustrating feeling in the world: watching opportunities go by when you have no capital.

[Snow Leopard]

Stand for 5 - 10% at $0.58

[warthog]

quote:Originally posted by Paper Tiger

Stand for 5 - 10% at $0.58


UBS New Zealand Limited has provided the following Notice:

Market stand - Feltex Carpets Ltd

UBS New Zealand Limited has received instructions to acquire shares in a market stand in accordance with the details set out below and as required by NZX Participant Rule D10.7.4:

Name of issuer: Feltex Carpets Limited

Class of equity security: Ordinary Shares

Percentage and number of securities sought: 10% (14,941,187 shares)

Price of the bid: 58 cents

Bid Period: Earlier of completion or 5.00pm, Tuesday, 28 June, unless the bid is terminated by UBS

Acceptance: In order of time of entry

Condition: Acceptance of bids conditional upon a minimum of 5% (7,470,593 shares) of ordinary shares being purchased in the stand

As the stand is conditional on a minimum level of acceptance, the stand will be conducted under the Spec 1 Code. The stand will commence at 10.00 am on Tuesday 28 June.

The condition relating to achieving a minimum of 5% of ordinary shares purchased in the stand is for the sole benefit of the bidder and accordingly may be waived by the bidder by notice to the NZX. Otherwise the bid is free from conditions.

[winner69]

Bugger ... it was meant to be for 60 cents

Maybe tomorrow the price might go up even more as more speculators/buzzards move in

[Dazza]

well a quick 50% gain for those that picked up at 40cents
well done!

[croesus]

The only Buzzards whiner69 are those who promoted this stock to gullible Mums and Dads
(excuse the pun)

[Krustytheclown]

Well done to all who got some lately.....and have held on for the last few days!!!

Good profits to be had!

Gregor.
Disc-got none:(

[Bottom Feeder]

WOOHOO!

[Ted2]

quote:Originally posted by Paper Tiger

Stand for 5 - 10% at $0.58


GPG ????:D:D:D:D

[Bud Fox]

The acquirer is looking for 15 million shares.

Based on initial volumes, this does not look likely.

So, maybe 58 c.p.s is the new 'floor'?

Bud Fox
2002 NZ Stock Guru Champion

[blackcap]

I see some clown of an incompetent broker sold some at 57 cents and 56 cents on the open market.

Have ppl no brains anymore these days?

[Snow Leopard]

So, these are the people behind todays stand, who obviously would like a blocking stake in FTX, ? in order to defend their own position in the carpet market ?
The price seems to have moved on from their stand price.

It is working out well for those of you who took the risk.


quote:
FTX
28/06/2005
GENERAL

REL: 1305 HRS Feltex Carpets Limited

GENERAL: FTX: Australasia's leading Carpet Manufacturer looks to FTX merger

AUSTRALASIA'S LEADING CARPET MANUFACTURER LOOKS TO FELTEX MERGER TALKS

Godfrey Hirst Australia Pty Limited ("Godfrey Hirst") today announced that it
has acquired a shareholding of approximately 5.78% in Feltex Carpets Limited
("Feltex") through on-market purchases of shares over the last few days, and
during a market stand this morning, which is still being executed.
Consequently the shareholding is expected to increase during the day.

Godfrey Hirst Finance Director, Jim Walsh said that following the acquisition
of this shareholding, Godfrey Hirst would look to enter into discussions with
the Feltex Board about a possible merger of the two companies.

"We believe that a merger between Godfrey Hirst and Feltex could have
benefits for shareholders of both companies. However, this is the first step
in what will be a long, considered process for us.

"Given the current serious difficulties Feltex is facing, any merger would be
subject to the receipt of further information on the current financial and
operating status of Feltex and also subject to any regulatory consents that
may be required," he said.

Walsh said Godfrey Hirst does not intend, at this time, making an Offer under
the Takeovers Code for the remaining shares of Feltex that it does not
already own.

Godfrey Hirst is a privately owned, fully integrated carpet manufacturer in
Australia. Together with its sister company, Godfrey Hirst New Zealand
Limited, it is Australasia's leading manufacturer of high quality carpet in
both the residential and commercial carpet sectors.

The McKendrick family, originally from New Zealand, purchased Godfrey Hirst
in 1966 and still own the company today.

The Godfrey Hirst Group exports product throughout Asia, Europe and America.

- ends -

.../2

-2-

For more information please contact Trish Sherson at Raynish & Partners on
(09) 309 6663 or Andy Coupe at UBS New Zealand Limited on (09 913 4878) or
021 972 207.

More information about the Godfrey Hirst Group and its operations can be
found at www.godfreyhirst.com and www.godfreyhirst.co.nz
End CA:00117319 For:FTX Type:GENERAL Time:2005-06-28:13:05:22

[Cooper]

Yeah I agree PT, congrats to Belg and all the others who had the cajones and nouse to buy earlier. I had looked and agreed with Halebop that it wasn't for me, so I totally missed the boat. Well done.

[K9]

quote:Originally posted by belgarion

Got anything to say puppy dog? [}:)]



Wow Belgor, must be a great relief for you:D up 30% on $5k

all that pressure...:(

is this one of your mystery 100%ers? hold or sell?


:D:D:D:D:D got anything to say about WHS at $2 or the forgotten AIR plan[B)]?



breath while you can, you still hold a mut

[K9]

Many stakes have been laid down against you Belg...and you choose to run away from them all over this site...a simple example would be your 2 recent calls on AIA and WHS.

Why don`t you back up your claim to knowing 100% stocks on the NZX over the next 2 years? It was a big boast that you wormed and squirmed your way out of, shedding your credibility once again.

Is FTX one of them from here?


If there is any measure of your Guru status, it would have to be your position of 81 in the stock comp.[xx(] underperforming the index by some 300%+


A punt on FTX doesn`t change your shockingly bad track record.

[winner69]

Changed the heading last night to '60 cents here we come' because ear to the ground stuff suggested something on the way

Seeing Hirst didn't get what they really wanted I'd say still plenty of action still to come.

Feltex is still one sick dog but $90M market cap as today is still pretty good value for a predator.

One thing for sure though is that Feltex's life as an iconic NZ brand is short lived. Pretty much dollars to donuts now that NZers wont be making much of the carpet ... it's just a matter who pays for all the closures now.

BELG ... done any research on Hirst and what they might do now?

[Elise]

That's okay K9 - he has more credibility in my mind than you ever have had... or ever will...

[tsb]

yeah K9 your posts suck

[K9]

oh, there goes the site nanny and a newbie (steve) with nothing of insight at all to contribute, but for some strange reason likes to keep score.

Easy to comment on credibility from inside your glasshouse?


take that naughty boy, (slap with a wet bus ticket[B)])

[Halebop]

A debate about the pros and cons of Feltex is very useful so I'm all for discussion, even if it gets heated. Different perspectives are useful, even if only to consider and discount.

Off topic and "personal" vitriol and carping is distracting and annoying. How about at least keeping the argument on topic?

Godfrey Hirst: I didn't see that coming! Well done to all the delvers who took a punt. Still not my cup of tea.

[K9]

Right now my long time losing clod...

you should have been investing in JPY and AUD investments

as I am doing and have said on the site recently.

I sent alot of $$$ to JPY at 77-78.

I have 95% of my stocks now in AUD/ASX



You can stay in NZ and invest in dogs all you like sucker.

Its mostly downhill from here

I made my $$$ in PVO, FBU, NPX, RPL, TTP, EBO, GPG, CDL, IFT, ROC and my calls are well documented on this site, as well as my 5th place in last years stock comp with over 80% using my real stocks.

many 50%-200% + stocks and now I`m moving on clod head.




you have been in cash since late 2002!!! That is why you are full of ****

[The BOWMAN]

This sick K9 breed dog even dropped his **** in my trash collecting email account. Drop more there as I might check it again in 2009. Did you do some analysis up there? You no brain cowardly loser.

[The BOWMAN]

Stop making up stories, dog of K9. You can't make money. Cause you are STUPID!:D:DNo one will believe you. Blah Blah Blah. All Bullcrap!

[K9]

I will tell you this [u]once</u> BOWMAN

Met me, I will give you my details, and come and tell me to my face.

I`m serious, face up, I`ll be waiting.

thecruisercompany@hotmail.com

Do YOU have the spine?

[The BOWMAN]

quote:Originally posted by K9

I will tell you this [u]once</u> BOWMAN

Met me, I will give you my details, and come and tell me to my face.

I`m serious, face up, I`ll be waiting.

thecruisercompany@hotmail.com

Do YOU have the spine?




So what? You going to hit me with your little fist? I'll beat the crap out of you.

[Snow Leopard]

I see this debate has reached new heights of intellectualism.

This could become the first free-for-all thread brawl?

Personally, I would be grateful if you would all go to seperate corners and ignore each other for a while.

[warthog]

quote:Originally posted by Paper Tiger

I see this debate has reached new heights of intellectualism.

This could become the first free-for-all thread brawl?

Personally, I would be grateful if you would all go to seperate corners and ignore each other for a while.


Second that. Why not move this discussion to email between you.

I for one am not interested in the outcome, either.

[K9]

:D:D:D:D:D:D

I don`t give a toss about your FTX clodarion


did you read the post at all? I did answer...loser[^]


BTW, I have never seen you call a monster return on this site in your pathetic 4 years.
Remember ATR, yes I was on the ground floor with Dimebag, all documented on this site. I gave my buys, invested in the rights and sold for between 950%-1080%. I also said when I had sold and thought it was time to move on for me with ATR, which has proved the correct thing to do.

Look at you gushing over 45%[:I][:o)]...you can stick ya carpet roll where the sun don`t shine airbusboy


Barfarahaaraharharhahahaaa[^]:D[:p]

[Sky Tower]

quote:Originally posted by winner69


quote:Originally posted by rmbbrave

I bought 6500 this morning at .48 and put in a sell order at .51 not expecting them to sell but they did!

Profit $135.


Should have waited a bit longer mate .... worth more in a few days I would say


Good call! now 0.64 cents. nice profit.

[Bottom Feeder]

WOOHOO! WOOHOO! WOOHOO!

And that just for the fight, can you imagine how I feel about the share price. Check my post of 24 June. I wont tell you how many share I bought, it'l make you cry.

[Sky Tower]

have u sold tho?
Bottom Feeder what you have there is an unrealised profit.
Exactly when are you going to sell?

[Sky Tower]

I guess what Im saying is I can never resist taking a profit like that. Whereas maybe I should be a little more discuplined.

Anyway it takes courage to buy in at that price, with a company like this

[Bottom Feeder]

I think you are right. My luck has held out so far.

Will sell tomorrow!

[The Apprentice]

What are the scenarios for FTX from here?

The failure of Hirst to reach 10% leaves the door open for a takeover play from someone else, or perhaps someone else will gun for a 10% blocking stake?

Or Hirst might try for 10% again?

Talks of a merger with Hirst are also surely positive for the share price.

Perhaps a corporate raider like GPG might get in the game looking to capitalise in either situation?

All in all everything currently happening and the possible scenarios surely point towards more profits to be made out of FTX.

What does everyone else think?

[K9]

YOU ARE FIRED, GET OUT NOW

[Crusader]

K9 - woof woof - appropriate.

Tough talk - F.O.S.

It really is a shame that this thread had turned to personal insults - well done on your 5th place in last years competition and the string of amazing stocks you seem to have ridden since then - have you not heard of the concept of modesty on Upper Volta?

PS. Where is that? Dog heaven?

Crusader.

[Westie]

Good for those that have made money here. While I like beaten down stocks, I'm with Halebop, this still isn't my type of situation.

If you are holding, don't forget that ftx isn't out of the woods yet. Even though Godfrey Hirst has stepped in & the sp has gone up, nothing has changed about ftx's operations. The management weren't upfront before, it is still possible that there are things that aren't out in the open yet. It appears to me that while GH can possibly turn ftx around, even they don't know the true state of ftx's affairs.


quote:However, he cautioned that given the "serious difficulties" faced by Feltex, any merger would only come once Godfrey Hirst knew more about its current financial and operating status.

HWE came close to being bought before the buyer walked away after finding out the true seriousness of their situation.
On the plus side, unlike HWE, ftx is a cash business that is still making money & still appears to be covering its interest cost for now. So long as it breaks even after interest costs there will be benefits for GH.


quote:A reverse takeover of Godfrey Hirst by Feltex Carpets was shaping up as the most likely option, market sources said. This would allow Feltex to stay on the market while dashing investors' hopes of a takeover with a cash premium.


That's my 2 cents worth. Have fun!

[Bottom Feeder]

Sold some this morning. Damn, just as I go to sell the price drops.

Will have to wait now. Not good holding on a falling market.

If it drops another 10 cents will have to buy them back.

[winner69]

If Hirst find there is some value in FTX a reverse takeover on the cards ... ie FTX buys Hirst

So how much is Hirst worth?

Sells more than FTX and CAV snd based on sales multiplies of CAV and FTX (IPO) you would have to say that Hirst is worth at least $300M

Can't see Hirst giving away their company

So how does FTX 'pay' for Hirst ... can't borrow much more against FTX assets so suppose they would need to issue heaps of FTX shares.

Now that would be interesting for existing FTX shareholders

Only conjecture, assuming that FTX is actually worth much

Have a share consolidation of one for every 150 and then issue 300million shares to Godfrey Hirst would be about right if Winners valuation of Godfrey Hirst is about right.

[winner69]

quote:Originally posted by belgarion

Enigma, haven't done the maths that something like that makes sense.

GENERAL: FTX: FELTEX MOVES QUICKLY ON SENIOR MANAGEMENT REVIEW (http://www.directbroking.co.nz/scripts/viewannouncement.asp?session=0&instrument=FTX&exchange=NZSE&reference=1062512)

About half a mil added to the bottom line?


About $1.2M to pay out the losers but thsts OK because that is a restructuring cost and won't affect 'normalised' earnings will it belg.

Hell ... more than $1.2m to get rid of 4 people .... wonder what getting rid off a 100 or so workers will cost?

Feeling confident at 60 cents belg?

I took my profits the other day but plenty of action still to come one way or the other so need to keep watching this space.

[Lizard]

Godfrey Hirst are cash rich c.f. Feltex. A good match, but merger terms will have to focus on asset values rather than sales.

[winner69]

quote:Originally posted by Lizard

Godfrey Hirst are cash rich c.f. Feltex. A good match, but merger terms will have to focus on asset values rather than sales.


Agree Lizard ... only using sales as a guide as to what assets might be .... until we know more

[Lizard]

I thought it was rather a "non-announcement" myself. Given they had already said they were going to talk to GH... The fact talks were "constructive" could just mean FTX management are keen for a solution other than the ones the banks might be proposing.

Also, a risky strategy, as if they push the FTX share price up too far on speculation, they could push it above the threshold of merger value, making it difficult to reach an agreement that suits both GH and FTX shareholders.

If it all works out, there should more than 80 cps for FTX shareholders - but right now, there is a big risk attached to that potential return.

Belgarion for those dreaming of 80 cents they are mad GH will let the recievers takeover first and buy it off them rather than pay anywhere near that price.

[winner69]

Those poor workers in Foxton, Feilding, Dannevirke and Kakariki .... not looking good for a Merry Christmas for these souls .... and heaps of restructuring costs

http://www.stuff.co.nz/stuff/0,2106,3343290a13,00.html
Feltex boss tries to reassure North Island workers on jobs

13 July 2005

Feltex general manager of New Zealand operations, Ian Barbour, has assured Manawatu staff they have jobs for a while yet.


He was visiting the Foxton carpet plant on Monday to talk to staff in the wake of concerns about Feltex's profit for the year to June 30 achieving only half the expected levels.

A year after listing on the stock exchange, Feltex's share price has gone from $1.70 to around 60c.

Chief executive Sam Magill and four senior executives have announced they will be leaving by the beginning of December.

Feltex is now talking with Australian-owned rival Godfrey Hirst about a possible merger.

The upheaval is a far cry from the upbeat mood surrounding the purchase of the Foxton plant a year ago.

However, Mr Barbour said the mood among Feltex's 650 North Island staff is still "as good as could be expected".

AdvertisementAdvertisement"I've spent a lot of time since this news broke talking to people at the plants. Clearly it's an unsettling time for them, but I'm encouraging them to keep their chins up and soldier on."

While not at liberty to speculate on the outcome of talks with Godfrey Hirst, he said it was clear that if a merger took place, there would need to be a review of capacity.

However, he remained confident in the durability of Feltex.

The Foxton site was testament to the company's ability to overcome setbacks.

Twenty years ago, the company's then-owner, Equiticorp, sold the factory, which was leased back to Feltex.

Equiticorp was a victim of the 1987 sharemarket crash, leaving Feltex to forge its own path.

Last year, promising long-term development on the site, the company bought back the former flax works.

Mr Barbour has been with Feltex for 30 years and said as long as executives work out a good business strategy, the company would continue to keep large numbers of people in Foxton, Feilding, Dannevirke and Kakariki in work.

"Personally, I think it's a good business and it's got good people. We've just got to get the business in a shape that makes it a sound business moving forward."

He said the company was moving as quickly as possible to resolve its financial situation and understood its employees were not keen on uncertainty.

"But it (a decision on any job losses) is a matter of months, not days, away and they understand that."

[winner69]

Oh bother .... The Westpac-Melbourne Institute consumer sentiment index fell 5.5 percent to 107.5, and is now 9.9 percent below its level of one year ago.

Feltex say this index is one of their key market indicators .... in Feltex lingo not good news at all .... maybe even these Hirst guys might walk away now.

Interesting to note the long serving director who was the chairman of the risk management committee has packed a sad and resigned the other day

Thats 2 directors gone lately ...

[K9]

quote:Originally posted by winner69
Interesting to note the long serving director who was the chairman of the risk management committee has packed a sad and resigned the other day

Thats 2 directors gone lately ...


FTX risk management!!!...:D...more likely got a friendly nudge[}:)]

they should all be booted given the ANNs to market

[TheGuv]

quote:Interesting to note the long serving director who was the chairman of the risk management committee has packed a sad and resigned the other day
More of a burnt offering to the shareholders IMHO; it would be easy to assess the company's current state and wonder how effective their risk management strategies had been. There will be more sacrifices before the company has the kind of management team required to turn it around. The point of interest will be to see who they appoint to the key positions.

I am amazed Magill is allowed to stay until Dec. Still, they would need a face to put in his place with the requisite skills - I shouldn't imagine recruitment is a fast business at that level, in addition to their current profile.

Ho hum.

the guv

[winner69]

So Horrocks was a bit peeved about the handoutd for the guys are have been given the short shift .... integrity in the Feltex boardroom

Maybe even an indicator that Magill is going to get millions and millions and Horrocks didn't want to stay around for that announcement

The Guv - agree with you in comments re magill staying on etc ... amazing

[rmbbrave]

The following article reckons Feltex's full year profit for this year will be about $12.5m.

At the current SP of 0.59 the Market Cap is $88m - so the expected profit is 14% of the Market Cap.

Does anyone think Feltex is a good long term investment?


Another twist in Feltex yarn

16.07.05

By Georgina Bond


Godfrey Hirst's play for ailing rival Feltex presents an interesting twist in the yarn of a New Zealand carpet pioneering family.

If the Australian carpet maker succeeds in merging with Feltex, its New Zealand owner, Kim McKendrick, will be joining forces with the company that swallowed one of his father's first carpet businesses almost four decades ago.

The late George McKendrick's Kensington Carpets - once the country's largest exporter of wool carpets - was sold to Feltex in the late 1960s.

One of George McKendrick's first carpet salesmen - who asked not to be named - suggests the sale was an aggressive power play, and that Kim McKendrick is now carrying out his father's wish to take revenge on the carpet manufacturer.

He recalls George McKendrick promising "to one day be big enough to kick their [Feltex's] ****".

Others downplay the likelihood that the potential merger is rooted in an inter-generational grudge.

A fiercely private Kim McKendrick said he was only 10 years old when Kensington was sold and he is unaware of the details, or of his father's relationship with Feltex.

A fortnight ago however, his company became the biggest shareholder in Feltex, paying almost $5 million - or 58c a share - for a close to 6 per cent stake.

Its ambition for merger talks was achieved last week, when Feltex chairman Tim Saunders met McKendrick to discuss the possibility.

Discussions are now on hold until the Feltex board meets this month.

McKendrick said yesterday he was ready to proceed as rapidly as possible - a move that would be in the best interest of both companies.

Godfrey Hirst, with annual turnover of $350 million, and Feltex, with annual turnover of $300 million, are significant wool and synthetic carpet producers on both sides of the Tasman.

Merging the two would create the largest carpet manufacturer in Australasia.

McKendrick looked at buying Feltex before its listing last year when investment bankers were looking for a trade buyer but decided the timing was wrong.

But he seized his chance late last month when Feltex's second shock profit downgrade saw its shares plunge as low as 39c, against a listing price of $1.70.

Feltex is now expecting its full-year net profit to be half the $23 million forecast at its $243 million stockmarket float last June.

Chief executive Sam Magill is set to leave at the end of the year with four senior managers he worked closely with, and the company has launched a full review of its operations to counter the drastic slump in the Australian housing market, on which it blames it woes.

McKendrick said the market softening had not hurt Godfrey Hirst to the same extent, and it had maintained profits through cost cutting.

But the industry needed rationalisation, and a merged company would have greater ability to withstand the flow of cheaper imported carpets from Asia and more opportunities to export, he said.

"The logic of combining the businesses is compelling, as significant synergies should be achievable."

Kim McKendrick took over the reins in 1999 when his father died, after starting from school as a management cadet.

Developing export markets has been one of his focuses, helping the company to be less reliant on the housing cycles in Australia.

The company employs 1400 people on both sides of the Tasman, including 600 at plants in Manukau, Christchurch, Napier and Invercargill.

[rawdata]

Full year profit is irrelevant. All the profit was made in the first half with a loss in the second half. So no point trying to calculate value based upon PER, DCF or EBITDA multiples.

The directors of this company along with Sam Magill are unquestionably totally incompetent.

What is very worrying is that the continuing loss of executives and directors as they flee a sinking ship is that Godfrey Hirst could very well end up getting this company for nothing.

If I were Godfrey Hirst, I will negotiate whilst applying maximum competitive pressure in the market at the same time. I will let Feltex blunder from one sale to another sale to just keep the banks happy - let Feltex run itself down.

Then I will walk away from the negotiating table after getting all the information I want on Feltex.

Then, the fun begins.

Think about this as a scenario - if Godfrey Hirst goes away, how quickly will the banks move in to protect their loans and as long as the receivers can get the loans back, they will be happy to sell the equity for $1.

The $8m spent so far is very cheap.

[The Doctor]

this IPO is best described thus...'WHAT A RIPOFF'!:(

[Snow Leopard]

Good to see the company is doing well again ;)
[quote]quote:
FTX
28/07/2005
FORECAST

REL: 0917 HRS Feltex Carpets Limited

FORECAST: FTX: Feltex Acts to Improve Profitability

The Feltex Board announces that after a profitable 4th quarter for the year
ended 30 June 2005, the preliminary unaudited operating result (before
one-off restructuring costs) for the 2005 financial year is $13 million
(NPAT). This is $1m higher than the 20 June Earnings Guidance. The Board
reaffirms that no final dividend will be payable.

The Board continues to move with urgency on its commitment to improve
operating profitability. Forty-two additional salaried positions will be
made redundant, in addition to the four senior executives whose departure was
announced earlier. Inventory levels are being reduced to match sales demand.
The review of operations is continuing. And the Board has resolved to seek
financial information from Godfrey Hirst to further consider their request
for merger discussions.

Preliminary unaudited operating result for the year ended 30 June 2005
The preliminary unaudited operating result for the year ended 30 June 2005 is
$13m (NPAT) which is $1m or 8.3% higher than the 20 June Earnings Guidance of
$11.5m to $12m. This is before providing for one-off restructuring costs for
the CEO and four senior executives who are leaving the company.

The slight improvement in the NPAT is due to several factors: slightly higher
sales; slightly lower sales rebates to retailers; tighter control of
overheads; the slightly better performance of Carpet Call, the 50% owned
carpet retailer; and the accounting for previously unrecognised timing
differences in taxation.

As previously announced, there is an one-off restructuring cost for the four
senior executives of $1.2m ($840,000 after tax), mainly comprising
contractual employment entitlements, that will be provided for in the 2005
financial year result. The cost associated with the departure of the CEO,
Mr. Sam Magill will be provided for in the audited results for the 2005
financial year. The announcement of the audited result on 24 August will
include a full review and analysis of the financial performance of the
company, quantifying one-off costs incurred during the year.

Operating Conditions
The operating conditions that were experienced in the 4th quarter of lower
sales, pressure from imports and tighter margins are expected to continue
into the first quarter of the 2006 financial year. The company is operating
profitably under these conditions, but at a level that is unsatisfactory to
the Board. The review of operations will generate savings that will improve
profitability for the 2006 year.

Operational review
The Board is making 42 salaried positions redundant as part of the first
phase of the operational review, in addition to the previously announced
departure of four senior executives. The annualised savings for the 46
positions will be $4m before tax and for the 2006 year the savings will be
approximately $3.2m before tax. The one-off redundancy costs, including the
$1.2m restructuring cost for the earlier announced four executives, total
$3.4m before tax.

A full review of the manufacturing operations is underway, assisted by
external advisors. Initial decisions on the review of manufacturing
operations will be implemented this year and deliver savings in this
financial year.

Inventory Levels
With the slowdown in sales as a result of market conditions, particularly in
Australia, inventory levels have increased over the last five months. This
is being addressed by reducing production levels. Consultation is underway
with staff and unions at North Island yarn and carpet plants to temporarily
reduce the working week. The cooperation of the unions and staff in working
towards the objective of reducing production to bring inventory levels back
in line with demand is appreciated.

F

[Capitalist]

It is. Behavioural economics is such an interesting topic. The sheep whirl and turn. If there is a whiff of bad news they head for the exit. Perception vs Reality. Same with FBU.

Good topic change Winner ;)

[CrossTrainer]

Nice rise of 6 cents today $0.58 to $0.64 on the press release re restructuring. I am happy that I bought in at stages in the low $0.40s.

[Lizard]

Sorry PT? Flogging off inventory (at a discount perhaps?) and reducing production is "doing well" !!!!

If they couldn't tweak the books on a short time frame (and excluding restructuring costs!) to come up with a 1 mill profit, well, personally, I'd fire the accountant!

This announcement means nothing. They reduce inventory to free up cash. Well how predictable was that !!!!!

[Snow Leopard]

:D:D:D
perhaps instead of:
Good to see the company is doing well again ;)
I should have of:
Good to see the company is doing well again

But seriously, if you read the notice the "inventory levels have increased over the last five months". You need to read the announcement carefully and not extract more than is actually stated.

Disc: hold none. Though, maybe I owned some for a while this morning [:I]

[winner69]

Yep really confusing

in one sentence inventory is being reduced but later on "inventory levels have increased over the last five months."

Hell they had enough carpet a few months to cover many months of sales .... and ey sales are slowing even more so heck they have in real terms even more carpet.

So the poor old workers need to work shorter weeks ... at least that will give them a bit of pocket money before they lose their job for good and join the 4 bosses and 42 salaried workers as not wanted.

Must be one heck of a place to work at at the moment

One prediction Feltex will be making very little carpet in NZ this time next year

But i do wonder how much carpet FTX does have in stock at the moment

[Lizard]

[8D] Sorry PT. My sarcasm detector wasn't working. Sandwiched as you were between Winners new headline and Caps seeming agreement. Hope you picked up a few $$$ there.

[Snow Leopard]

Good news at the top so you read it.
"Inventory levels are being reduced"
Bad news further down, (hopefully you have given up paying attention and perhaps skip that section).
But even so, they are higher than they were five months ago.
It is not beyond the bounds of possibility that at least part of the profit is because of increased assets, i.e. all that extra carpet. But you have to wait for the annual report to find out.

PS I think that maybe w69 and cap do sarcasm as well.

[tsb]

I'll buy a house lot if the price is right - anything to help a reduction in inventory.

Wonder if there are any managers left to read the site though?

[TheGuv]

quote: I'll buy a house lot if the price is right - anything to help a reduction in inventory. Yeah ditto - shame there's no shareholder benefits other than short nails
!

I quite enjoyed the announcement, especially the language used - "slight improvement" was a consistent theme - although they forgot to reinforce the message with something like 'yet significant'.

They're at least doing something - even if it's not the miracle turnaround that most would wish/hope for. Could that be a feature of the average mom/pop shareholder - hoping for the best?

I'm hanging on to mine to wait and see what happens.

[rmbbrave]

http://www.cch.co.nz/hs/articles/training.asp

The highest fine to date has been $20,000 against an airline for failing to train a loader operator in the correct operating procedure. In this incident, the employee suffered severe crushing to his left leg, resulting in subsequent amputation above the knee.

[minimoke]

Worker lost his arm in an accident in Christhurch today. Last year they were fined $4500 under and ordered to pay $3479 in reparations after a worker's wrist was broken. Things don't look good on the shop floor!

[minimoke]

Belg - "Man loses arm in industrial accident

10.08.05 2.30pm

A worker at a Feltex Carpets plant in Christchurch lost an arm after it was caught in industrial machinery today.

A St John spokeswoman said an ambulance had been called to the plant about 10am and had taken the injured man to Christchurch Hospital in a serious condition.

- NZPA"

[zac]

Do the IPO investors get any compensation for the arm and a leg they lost?

[Steve]

quote:Originally posted by zac

Do the IPO investors get any compensation for the arm and a leg they lost?

That could depend on the result of the complaint that the NZSA(?) lodged over the prospectus. *Assuming that the matter is still being looked into*

[winner69]

Chalkie in The Independent ... interesting phrase that 'ex merger' price. What will happen if Hirst aren't interested anymore?


Crouching groom, bashful bride

Few mergers create any real value. The guys pushing them invariably overestimate the benefits of synergies and "cost-outs," and underestimate the difficulties of trying to weld together two or more disparate and often warring cultures.

Just ask the chaps at Baycorp Advantage or RMG.

So Chalkie hasn't been much surprised by the line being pushed by Godfrey Hirst's host of advisers and PR flacks: synergies by the bucketload and lucky Feltex shareholders rolling in wads of cash, if only their deadbeat directors will stop fooling about and cut a deal.

What did raise Chalkie's eyebrow was Godfrey Hirst's timing, and the aggressive way it's pushing its suit.

Some might say it's an ungallant bridegroom who drags his intended so forcefully towards the altar when she's still in trauma from her recent, er, misfortune.

After all Feltex, having "projected" a bumper $25.9 million June-year profit, was until last month expecting to lose money in the fourth quarter. Even after finding an extra $1 million to $1.5 million fallen behind the drinks trolley, it expects to make only $13 million, or half the figure it was predicting in February.

In those circumstances, some of Chalkie's mates grumble, the board's job is to grab a tourniquet and staunch the bleeding. And that's what they've done; the latest "guidance" implies a fourth-quarter profit of $800,000 - not much, but it beats a loss.

Only when that's done should the board distract itself by talking to importunate, opportunistic merger merchants from across the Ditch. What's the hurry?

On the face of it, that view looks pretty sound. But a few things are a worry to the boys at Godfrey Hirst and should be, they reckon, to Feltex shareholders.

First, Sam Magill is still acting as chief executive despite having announced his resignation.

To move on from the wedding metaphor, that's like having the captain who ran the boat aground standing on the rocks directing the rescue. A cynic would say the longer he delays merger talks, the less it looks like Godfrey Hirst bailed the Feltex board out.

Secondly, Godfrey Hirst has made it clear it sees the management of any merged entity being dominated by its own executives.

But the Feltex board is looking for a new managing director, who will presumably want a contract with a golden parachute big enough to land an airborne division. It has already appointed three new divisional managers and made 42 salaried staff redundant, not all of whom Godfrey Hirst would necessarily have wanted to go.

In short, Feltex is in danger of putting in place an infrastructure that might have to be collapsed post-merger or could even reduce the merger's logic to the point where Godfrey Hirst loses interest.

That isn't to say Feltex isn't doing some things right.

Talking to the unions about reducing that growing pile of unsold carpet, for example, makes solid sense.

And if the board starts talking seriously about a merger, it can scarcely be blamed for trying to find an alternative suitor to put some competitive tension in its merger valuation. Perhaps that's what chairman Tim Saunders was doing overseas last week.

But Chalkie reckons shareholders will, like Godfrey Hirst, be getting a tad impatient.

For Feltex, market conditions are no more forgiving than at the beginning of the year when things started turning to custard. If anything, they're getting worse.

Before UBS' stand in the market to grab Godfrey Hirst's Feltex stake, the shares were languishing at 43c. The recent level of around 60c clearly anticipates a merger and attendant synergies; if Godfrey Hirst walks, the price can be expected to go "ex merger" pronto.

[Snow Leopard]

Wan't worth the drumroll:


quote:
FTX
24/08/2005
FLLYR

REL: 1112 HRS Feltex Carpets Limited

FLLYR: FTX: FELTEX CARPETS RELEASES AUDITED RESULTS

The Board of Directors today confirmed the audited earnings before
restructuring costs for the June 2005 year were $13 million and, after
one-off restructuring costs, $11.8 million.

"This result reflects the adverse combination of factors that became clear to
us in late March. We have and are implementing wide-ranging changes to the
company. We are single-mindedly focused on rebuilding shareholder value in
the business as quickly as possible," said Feltex chairman Tim Saunders.

Operating revenue declined by 8.8% to $300.2 million. New Zealand sales
remained strong and were up 8.1% for the year while Australian sales declined
by 7.6%. The strong New Zealand dollar adversely affected the translation of
Australian sales into New Zealand dollars.

Margins on Australian sales decreased because of price competition from
imports, intense local competition and higher synthetic raw material costs.
These factors, and the 8.8% decline in operating revenue, lead to the 25.7%
decline in EBITDA.

The operating surplus was $13 million before the one-off costs for
restructuring and redundancies including that for the departing chief
executive and four other senior executives of $1.3 million after tax.

Mr Saunders also announced that Chief Executive Mr Magill will step down
today, and Mr Peter Thomas will assume the role of Executive Director until
the new chief executive is appointed and takes up the role.

"The Board has a good shortlist of chief executive candidates and we are on
track to make an appointment before the Annual General meeting in December",
said Mr Saunders.

"The Board has appointed Peter Thomas to the role because Sam Magill has
successfully completed the management restructuring that resulted in 46
management positions being made redundant."

Mr Thomas has been a director of Feltex for nine years and was an executive
of Credit Suisse First Boston in Australia for twenty years from 1981 to
2001, managing director of Australian operations from 1983 to 1994 and
chairman of New Zealand operations from 1990 to 1994.

Mr Magill has been the chief executive of Feltex Carpets since 2000 and was
formerly managing director of Shaw Industries Australia that merged with
Feltex in 2000. He has held positions in the carpet industry for 36 years.

"It is time for the senior executives, including those recently appointed,
to step up and work as a new team. Sam Magill has done a good job readying
the company for its transition to a leaner and different business, and Peter
will do an excellent job of overseeing the executive team until the new chief
executive is appointed.

"Good progress is being made with the operational review work-streams
examining the different options for plant relocation and rationalisations.
The Board expects to make decisions on this work in the next few months.
These will result in structural changes to our business that will generate
longer-term savings and much improved performance to benefit shareholders."

The Board has made the decision to revert to six monthly and annual
announcements of financial performance rather than quarterly as has been the
case for the past year.

"Any material matters will continue to be reported to the market as soon as
the Board is aware of them," said Feltex chairman Mr Saunders.

"The merger discussions with Godfrey Hirst remain at the stage of seeking
reciprocal information and agreeing to the terms on which it is to be
shared," said Mr Saunders.

For further information:
Michael Dunlop +64 (0)21 747 587
End CA:00119648 For:FTX Type:FLLYR Time:2005-08-24:11:12:26

[luckysexice]

SO what reaction going to be happen to the share price after they reach makert expectation

[winner69]

Tiger ... we will have to wait for the BIG writeoff in a few months time (quote)"Good progress is being made with the operational review work-streams examining the different options for plant relocation and rationalisations .... expects to make decisions on this work in the next few months.(end quote)

Strange they didn't get all the crap out of the system this year and make the provision this year.

That said they are obviously pretty close to some key ratios with the bank and couldn't afford lowering that equity figure.

If FTX/Hirst (or Hirst taking them over) were serious about merging doesn't make sense to be undertaking any restructure before hand ... unless part of the big plan

Whatever this could turn out quite messy but only time will tell .... a lot more to unfold yet I think

[warthog]

quote:Originally posted by winner69

Tiger ... we will have to wait for the BIG writeoff in a few months time (quote)"Good progress is being made with the operational review work-streams examining the different options for plant relocation and rationalisations .... expects to make decisions on this work in the next few months.(end quote)

Strange they didn't get all the crap out of the system this year and make the provision this year.

That said they are obviously pretty close to some key ratios with the bank and couldn't afford lowering that equity figure.

If FTX/Hirst (or Hirst taking them over) were serious about merging doesn't make sense to be undertaking any restructure before hand ... unless part of the big plan

Whatever this could turn out quite messy but only time will tell .... a lot more to unfold yet I think


The significant news here is that smartypants and friends are gone and the spotlight is on the new management to get things looking shipshape. I am bullish about FTX getting some fundamentals sorted out for the long-term, and don't think things are as bad as some would like to believe. If the market were expecting more from the result we would have seen something of a sell-off today.

disc.: FTX (although not an "original" shareholder :D)

[The BOWMAN]

Well said, winner69. It is still not in good shape. Are the workers still working 4 days a week at the moment? Very shaky.

[Lizard]

Warthog, I don't think the market cares particularly about the result. The shareholders are there waiting for a good deal from Godfey Hirst. Meanwhile, Feltex management are eating away at their asset backing with redundancy payouts and discounting of inventory. There may be reasonable upside potential to this share, but I don't think it's worth the risk atm.

[warthog]

quote:Originally posted by Lizard

Warthog, I don't think the market cares particularly about the result. The shareholders are there waiting for a good deal from Godfey Hirst. Meanwhile, Feltex management are eating away at their asset backing with redundancy payouts and discounting of inventory. There may be reasonable upside potential to this share, but I don't think it's worth the risk atm.


The redundancy payouts, as I understand it, are already dealt with.

I think you have hit the nail on the head though - it is a risk at the moment and if it starts to look better (i.e. lower risk) then you will be paying more for it.

I do think the market cares about the result though. If it were worse than expected, then FTX would have been hammered, as it would show that the people responsible for the shonky forcasts of late are probably still around. The market cares who is running FTX and the recent result is indicative of this. That said, as somebody else noted, there will be a fair bit of restructuring to come and if GH are interested, then they will want to be involved with this so it makes good sense to make some restructuring progress but not go at it hammer and tong.

[winner69]

Warthog ... FTX told everybody on July 27th that the unaudited profit before abnormals was going to be $13M ... so it was unlikely that it was going to be any different so yesterdays announcement was just confirmation.

What punters wanted was some idea as to what was going on and besides Sam going early they got little.

Re redundancy costs .. I don't think they have all been covered off. A while ago they said that the 4 senior execs cost was $1.2M ($840k after tax). Later on when they disposed of 42 more the one off costs went up to $3.2M before tax .. and I think Sam wasn't included in that.

Yesterday they said these totaled $1.2M after tax and that it included Sam ... doesn't seem to make sense

But all academic anyway because closing factories and all that will cost heaps more than this

Good to hear that FTX management are 'single-mindedly focussed on rebuilding shareholder value' and that it is time for 'the senior execs to step up and work as a team' (prsumes they weren't before?)

Agree that too risky at the moment but there probably will be more opportunities to make 50% again (like the ride from 40 to 60 cents was good).

Belg ... how do you see it the moment

[winner69]

I like the way that openness is also disappearing ... reverting to six monthly reporting eh

The pain was obviously too much too take every three months ... the excuse list wasn't long enough ... the stock pile not coming down fast enough

Quarterly reporting great when you have a good story to tell but better to keep bad news to yourself ... even though no doubt they will continue to keep the market fully informed?

[rmbbrave]

U-turn is still some way off for Feltex


25.08.05


By Georgina Bond


Feltex chief executive Sam Magill cut tracks from the carpet-maker four months early yesterday as it warned the tough times were likely to roll into the next quarter.

Meanwhile, as the company disclosed full-year profits had risen just $587,000 to $11.8 million, chairman Tim Saunders was locked in merger talks with its biggest rival Godfrey Hirst. No agreement had been reached by last night.

Magill originally planned a Christmas departure date. He quit in June after the carpet-maker's second profit downgrade in three months.

The company would not disclose his severance payout, saying it was included in the $1.3 million payout to four senior managers who shared responsibility for the downgrades.

Melbourne-based director Peter Thomas will fill Magill's shoes until a new chief executive is appointed. A decision is expected by year end.

Saunders was in Melbourne trading financial information on Godfrey Hirst, which snared a 10 per cent stake in Feltex in June. He said the full-year result reflected the medley of adverse market conditions responsible for the first profit downgrade in March.

They included a severe drop in consumer confidence and a sharp slowdown in the residential carpet market across the Tasman, where it earns 75 per cent of its revenue.

Analysts and industry players have since argued management should have anticipated the slowdown. Sales fell $29 million to $300.2 million.

Australian sales made the biggest dent in the earnings, down $11.3 million on the previous year as competition from imports, intense local competition and higher synthetic raw material costs eroded margins. Translating the figures into local dollars also reduced revenue by $5.3 million.

New Zealand sales remained strong however, up $1.6 million..

No final dividend would be paid because of poor performance in the second half.

The company said lower demand, tighter margins and pressure from imports was expected to continue into the first quarter of this year.

From now on, Feltex will release its financial results six-monthly, rather than quarterly.

Saunders said good progress was being made with an operational review of top-level management, plant costs, locations and capacity.

Forty-six positions have been made redundant so far. The $2.5 million provision for their severance and other restructuring costs would be included in this year's result.

Saunders said having completed his part in the review process, Magill was able to leave the company early. It was also time for the senior executives to step up and work as a new team.

"Sam Magill has done a good job readying the company for its transition to a leaner and different business, and Peter will do an excellent job of overseeing the executive team until the new chief executive is appointed."

A 36-year veteran of the carpet industry, Magill had been at the helm of Feltex since 2000. He formerly managed Shaw Industries Australia which merged with Feltex that same year.

Saunders said the board had a good shortlist of candidates for his position and was on track to make an appointment before its December annual meeting.

Thomas served on the Feltex board for nine years. He was an executive of Credit Suisse First Boston in Australia for 20 years to 2001.

In 1996, CSFB and a management team paid $19.5 million for Feltex. It sold out in last year's float.

Feltex shares, which have plunged 61 per cent since April, making it the worst performer on the NZX, were unchanged on 59c yesterday. The company is now valued at $88.2 million, compared with $250 million at its float.

[Halebop]

quote:Originally posted by rmbbrave

From now on, Feltex will release its financial results six-monthly, rather than quarterly.

Hmmmm.

[winner69]

Despite all the ravings about reducing the massive stockpile of carpet inventory levels appear to have gone up between March 31 and June 30th

They reported $80.8M inventory at March and it looks like they had $83.3 at end of June - another $2.5M on the stockpile.

FTX did say July 27th 'inventory levels are being reduced to match sales demand' ..... so maybe coming down at last ... but then $80M worth of carpet is probably enough to cover 6 months or more sales ... and the guys are still working 4 days a week making more
The review of operations is continuing

[Snow Leopard]

quote:
Feltex shares, which have plunged 61 per cent since April, making it the worst performer on the NZX, were unchanged on 59c yesterday. The company is now valued at $88.2 million, compared with $250 million at its float.


quote:
They reported $80.8M inventory at March and it looks like they had $83.3 at end of June

Buy the carpet get a free company!

[The Doctor]

its better than robbing a bank...turn under $20mil into $240 mil in under 10 yrs...good work if you Can get it...only in ...NZ!!

[winner69]

Whoops .... crashes to 52 cents

At least the departing Chief Operating Officer man got 58 cents for some of his lot

Wonder if todays lot were Sams ?

[winner69]

Belg ... what you do with your pyramid ... hope you managing this one OK?

Little buying interest ... can you blame anybody .... and some sales below 50 today

Tomorrow might see a close below that ... I sense some of the ex managers still have a few to sell ...

[Lizard]

Retailers all happy I believe...lots of lovely stock at good prices...

Competition might hit CAV this half though?

[trackers]

buying volume coming back on...looking at picking some up at 50 for the rise back up to 60.

[winner69]

No more excuses for poor sales

Remember Feltex's rave a few months ago that home renovations being down in Aust was the cause for the collapse in their sales.

Thats one excuse they can't use again


Latest report from the HIA, said that activity increased in the June 2005 quarter by 24.2 per cent and that over the year has only fallen by 0.5 per cent.

Using Feltex logic boom times ahead for them

Hurrah

Trackers ... maybe that is why the volumes are up

[trackers]

mm indeed 24% is a huge rise. will wait and see

[winner69]

Remember FTX used poor consumer sentiment as one of the excuses for their April Fools profit downgrade

BUGGER .... BAD NEWS ....it has happened again

Todays news is that The Westpac-Melbourne Institute's consumer confidence index slid 13.3 percent to 100.3 in September .... it is the eighth-biggest monthly fall since the survey began in 1974.

Oh well .... something for FTX management to use in future announcements

You read it here first though

[Dough Boy]

Don't touch this one, try CAV as they offer just the same sort of valuations (remember past sales are no gurantee of future sales nor any gurantee of a possible profit) without the stink.

[Lizard]

You're not a Market Analysis subscriber by any chance are you Dough Boy?:)

[Dough Boy]

quote:Originally posted by Lizard

You're not a Market Analysis subscriber by any chance are you Dough Boy?:)


Yes, you?

Find it good but still need to be wary sometimes on the buy / sell advice and I have found him to be a bit too quick off the mark in his recommendations. But his general analysis and info is very good.

[Lizard]

Since 1998. It's a recognisable condition - though apparently untreatable. ;)

[trackers]

On 24 August 2005 Feltex announced that Mr Sam Magill had stepped down as Chief Executive Officer and that Mr Peter Thomas had assumed the role of Executive Director until a new Chief Executive Officer is appointed.

The Board of Directors has been seeking to agree final severance terms with Mr Magill.

Unfortunately the Board has been unable to reach a final agreement with Mr Magill on terms that it believes are in the best interests of Feltex's shareholders and consistent with his employment contract. The Board has therefore terminated Mr Magill's employment with immediate effect. The Board's view is that the provision made in the 2005 audited accounts for the severance payment for Mr Magill's departure remains adequate.

The Board has also invited Mr Magill to resign as a director of Feltex Carpets Limited.

Mr Thomas will continue to act as Executive Director until the new Chief Executive Officer is appointed.

Tim Saunders
Chairman

*the interesting thing here is that buying volume has gone from approx 200k to 1.2 million today...thoughts? my initial assessment would be that people with inside info about the situation are now more keen to buy seens as it has been "resolved" ??*

[minimoke]

Tracker
Where are you geting your trading data from? Mine only shows $40k worth so far today!

[trackers]

meh my bad for the clarity, i mean the buying depth increased from 200k standing to 1.2mil

[warthog]

Looks like it's goodbye Mr Magoo. Why didn't this happen ages ago?

[Lizard]

How could he still be employed when he stepped down as CEO on 24 August? And if they were keeping him on in another capacity, surely it would have been at least polite to advise shareholders... How many shareholders realised he was actually still on the Board? Pathetic.

Perhaps Magill just wants to be reimbursed for all the money he's lost on his investment in FTX shares....? ;)

[warthog]

quote:Originally posted by Lizard

How could he still be employed when he stepped down as CEO on 24 August?


Simple. He wasn't CEO. He was still employed. My take: stay on until we can manage the changeover.


quote:And if they were keeping him on in another capacity, surely it would have been at least polite to advise shareholders...

I think they said something like this.


quote:How many shareholders realised he was actually still on the Board? Pathetic.

Perhaps Magill just wants to be reimbursed for all the money he's lost on his investment in FTX shares....? ;)


I would have sent him on garden leave, out of the way.

[winner69]

So Sams not been coming to work ... wants more ... and been sacked ... well done Feltx ... yeah right

And merger talks gaining little traction .... because Feltex are concentrating on putting their own restructure plans together .... good one

Wouldn't want to be a worker in Lower Hutt, Dannevirke or Foxton at the moment ... with Xmas coming up

http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10347605

[warthog]

quote:Originally posted by winner69

So Sams not been coming to work ... wants more ... and been sacked ... well done Feltx ... yeah right

And merger talks gaining little traction .... because Feltex are concentrating on putting their own restructure plans together .... good one

Wouldn't want to be a worker in Lower Hutt, Dannevirke or Foxton at the moment ... with Xmas coming up

http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10347605


The trouble with spin is that people assume it is there even though it might not be.

If one believed the spin previously, then ignored the (possible) lack of spin, then that doesn't look like a very good proposition.

[trackers]

up 3c / just over 5% on 750k volume so far today. looking v.nice.

enjoying the run, hopefully she'll get up to around 70c within the next 2/3 months imo


EDIT: Up 5c to close at 59/60 on over 1 million traded. Nice annual report in the mailbox

[winner69]

quote:Originally posted by trackers

meh my bad for the clarity, i mean the buying depth increased from 200k standing to 1.2mil


well spotted tracker .... and before the good news as well

[Lawso]

Out of curiosity, I've just gone back to page 1 of this mis-titled thread, dated Sept '04. Makes sad sad sad reading. S p was then around 160. Happily, I sold out in Feb '05 for 168cps, for a net return of 18.07% over 10 months Prior to the swap I had done nicely out of the 10.25% bonds.

Win some, lose some.

[TheGuv]

From the Herald 11/Oct. I had seen the price bounce up to .63 this morning, figured it must be something more than the rain...

[i]Feltex axes 235 workers

Carpet manufacturer Feltex is shedding 235 staff and closing a yarn plant in Australia in an effort to revive its fortunes.

The company's 900 New Zealand workers have come off better from the cutbacks than their counterparts across the Tasman where 185 jobs will be cut when the Braybrook yarn plant in Melbourne closes at the end of the month.

However, 30 workers will lose their jobs at the company's woven carpet operation in Christchurch. Another 20 management jobs will be lost in Melbourne.

The changes will result in savings of $11 million before tax - a figure analysts said was more than expected - against a one-off cost of $11.5 million.

Chairman Tim Saunders said there was no reason the bulk of the savings would not flow through to the bottom line.

The decision, which came out late yesterday, has been anticipated since the company disclosed plans to review all its operations in July in an effort to restore profitability.

The company has made two profit downgrades this year and its share price has plunged from its issue price of $1.70 in June last year to 59c last night.

Saunders, who has chaired Feltex for five years, said the company had looked at closing plants in New Zealand as an alternative to closing the Braybrook plant.

But it became clear closing Braybrook would be the best bet from the point of view of cost and the ability to service a growing market.

Feltex would continue to run a tufting plant in Braybrook to service its Australian customers.

Now all its woollen yarn would be made in New Zealand and, as demand increased, that would boost its workforce here.

Saunders was comfortable with the company's long-term future in woollen carpets, an area in which it was internationally competitive.

Closure of the Braybrook plant would mean the 600 New Zealand employees who had been working four-day weeks would resume normal hours earlier than planned.

The Christchurch woven plant - rumoured to be closing - would stay open despite strong competition from Asia. Saunders believed a move to service niche sectors of the woven carpet market would ensure the plant's survival but, in the short-term, 30 jobs would go.

The company was consulting with unions over the lay-offs, which are in addition to 46 management redundancies made in July.

The company's synthetic carpet operations, import arrangements and manufacturing of yarn were still being reviewed and decisions were expected next month.

However, the company was now through the worst in terms of its restructuring and job cuts, said Saunders.

He confirmed there would not be job cuts at the Dannevirke, Foxton, Lower Hutt or Fielding plants.

More redundancies or closures could not be ruled out at its synthetic operations in Australia.

"I'm not saying there will be or there won't be, but we're certainly examining the viability of that area at the moment."

Saunders did not think the initiatives would affect discussions with Australian carpet manufacturer Godfrey Hirst.

Saunders was due to meet GH, which has been seeking merger talks since snaring a 6 per cent stake in Feltex in June, early next week.

"What we're doing here makes good sense for the company as a whole, and certainly doesn't prejudice any initiatives which might be able to be taken in terms of a merger later on."

Godfrey Hirst could not be reached for comment last night.

Saunders hoped 2006 would be the year Feltex could "take everything on the chin" and that it would start making strides in 2007.

"The only thing we need now is for the market to turn up."

Analysts said costs savings set out by the company looked attractive and perhaps higher than they had expected.

But the extent of the savings fuelled scepticism about how the company was being managed.

"I find it hard to believe they can find $11 million from under the carpet," said o

[Halebop]

quote:Originally posted by Lawso

...Happily, I sold out in Feb '05 for 168cps, for a net return of 18.07% over 10 months Prior to the swap I had done nicely out of the 10.25% bonds.

Funny what a difference just a few months can have on returns. A worthy result all the same.

[CrossTrainer]

Unfortunately you sometimes have to make tough decisions to bring the company round and then hopefully there will be major benefits to the shareholders and staff. As a current shareholder I am counting on them growing from here.

[trackers]

well this is right, it had to be done. all the reports ive seen show that these results will indeed flow through to the bottom line, and coupled with the $4 mil p/a senior management cuts which are in addition, thinks look good indeed. recently purchased (following my own advice ^^) and very happy.

[TheGuv]

interesting to note the language used in today's Herald article; perhaps Godfrey Hurst perceive that the restructuring may offer a fighting chance for FTX intedendantly - or at the very least, diminish the bargain status for any merger that is in the wind?

Is a failure of merger talks with Godfrey Hurst likely to negatively impact FTX price, in light of their restructuring?

the guv

Aussies want Feltex bid answers

12.10.05

Feltex suitor Godfrey Hirst will be looking for answers on its merger proposal now Feltex's restructuring plans have been laid out.

Godfrey Hirst finance director Jim Walsh said yesterday he hoped to be able to say whether the merger was on or off in the next few weeks.

The two carpet rivals are due to meet in Melbourne on Monday to continue discussions on Australia-based Godfrey Hirst's proposal to merge their operations.

"We need to make headway now so we will be looking for some genuine progress on Monday and, on the back of that, to decide whether there's logic in proceeding," Walsh said.

Godfrey Hirst had given the Feltex board a "very attractive" proposal after netting a 5.83 per cent stake to become its largest shareholder in June.

Feltex had asked for time to complete a wide-ranging operational review that it hoped would revive its fortunes before weighing up the proposal.

On Monday, Feltex said it would axe 235 staff and close a yarn plant in Australia as a result of that review.

Walsh said Godfrey Hirst had been "more than patient" so far.

"I think to be fair to us and all shareholders we need to rule the merger in or out, and that needs to be in the near term."

The restructuring plans did not change the prospects of a merger.

"But I guess the more Feltex pushes on, and the more it changes things in its own right, it indicates the intent of the board and, to that extent, it makes a merger look less likely."

Feltex will make 205 staff redundant at its Braybook plant in Melbourne and 30 jobs will be lost at its woven carpet operation in Christchurch.

Still under review are its synthetic carpet operations in Australia, to what extent it becomes a carpet importer and the structure of its sales and marketing.

Walsh said the scale of Monday's changes was "significant".

"But it does beg the question, how you can make 200-plus people redundant and claim this will have no impact on the business?

"What were those people doing and what does that mean in terms of underlying trading levels?"

Walsh said Feltex's recent decision to switch to half-yearly rather than quarterly reporting of its financial results meant shareholders were "in the dark" as to what the $11 million it expected to save from the changes meant in terms of profitability levels.

Disc: FTX, MET, TWR, NEWBIE [8D]

[CrossTrainer]

Up another 2 cents today.

[CrossTrainer]

Up to 63c cents today - Best closing price since mid-June this year

[trackers]

interesting fact, didnt know that. a bit of a sell off, but overly covered by new buyers. good to see

[moe]

Looks like the initial proposed merger has fallen through. Seems that they have not ruled out some type of partial merger. How much will todays announcement affect FTX share price? I see that on ASBs home page that they are advising all clients to review theirFTX orders, do they(ASB)generally make statements like this?

[trackers]

well of course this is bound to affect the share price. some, lesser informed traders will see this as a very bad sign and will exit their positions. this always happens and is not a bigger.

what it comes down to is that this transaction would not, in the boards opinion, add value to the current shareholders, so its not going through. their current position plus the forthcoming benefits from restructuring still look strong at its current price, so theres not much concern in the long run. expect to pick up some cheap shares over the next couple weeks.

[winner69]

Remember what chalkie said a while ago .....

Before UBS' stand in the market to grab Godfrey Hirst's Feltex stake, the shares were languishing at 43c. The recent level of around 60c clearly anticipates a merger and attendant synergies; if Godfrey Hirst walks, the price can be expected to go "ex merger" pronto.

[winner69]

quote:Originally posted by trackers

well of course this is bound to affect the share price. some, lesser informed traders will see this as a very bad sign and will exit their positions. this always happens and is not a bigger.

what it comes down to is that this transaction would not, in the boards opinion, add value to the current shareholders, so its not going through. their current position plus the forthcoming benefits from restructuring still look strong at its current price, so theres not much concern in the long run. expect to pick up some cheap shares over the next couple weeks.


Could be right there trackers

Good market conditions and fTX made $24M .... add on the savings they are going to make that gives you $38M .... more to come makes say $45M

Bottom of the cycle now so expect them making $45M to $50M in a few years time

At 12 times earnings thats a market cap of $600M and a share price of $4.00

I did say a few years time

[rmbbrave]

Feltex decides to go it alone

19.10.05
By Georgina Bond


The planned merger between carpet makers Feltex and Godfrey Hirst has been called off, leaving Feltex to go it alone with its plans to revive the company's fortunes.

The decision was confirmed by both companies last night following their meeting in Melbourne on Monday to continue discussions on Australia-based Godfrey Hirst's proposal to merge their operations.

It is understood the Feltex board felt the offer was more like a takeover by largest shareholder Godfrey Hirst than a merger.

Feltex chairman Tim Saunders said in a statement the board could not support Hirst's proposal "in its present form", but was open to alternative proposals to combine the businesses.

Saunders said that in the meantime the company would push on with a wide-ranging review of its operations to identify cost savings that last week resulted in 235 jobs being axed and a Melbourne yarn plant closed - a move expected to save the company $15 million a year before tax.

More decisions on its restructuring are expected next month.

Godfrey Hirst finance director Jim Walsh said he was disappointed an agreement could not be reached, and believed the proposal it had put had been an "attractive one for Feltex shareholders".

"Clearly they formed a different view, that it was either insufficient or that they could do better on their own, and we weren't prepared to increase our offer."

However, the two rivals had agreed to explore opportunities to share resources or merge parts of businesses that held benefits for both companies, said Walsh.

"There's been nothing specific discussed but we've agreed that if there are opportunities that make sense, we'd look at them."

Asked if this could lead to plant closures for either company, he said no options had been ruled in or out.

Saunders was unavailable to comment further last night.

The decision ends an episode that started in June when Godfrey Hirst snared a 5.83 per cent Feltex stake to become its biggest shareholder.

This came soon after Feltex's second profit downgrade in a year, and its share price had plunged from its issue of $1.70 in June last year to a low of 39c a year later.

Feltex shares closed down 1c at 62c last night.


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[luckysexice]

So what is the ex merger prise going to be
Is it going to be under 50cent or stay around 55cent