Feltex (FTX) - All over for shareholders

[CrossTrainer]

Down 3c today but don't give up yet - The restructure might just work without the merger.

[Tumbleweed]

I wouldnt be too confident in this stock when your director sells his entire holding. (Peter Thomas)

E. Transaction
10. Date of last disclosure: 23/05/2005
11. Date(s) of acquisition(s) or disposal(s): 17 & 18/10/2005
12. Number of transactions: 2
13. Nature or type of transaction: on-market
14. Consideration: 15,000 @0.62; 15,000 @ 0.63
15. Number of securities held prior, set out by class and type: 30,000
ordinary shares
16. Number of securities subject to acquisition or disposal: 30,000 ordinary
shares

F. Extent of relevant interest
17. Number of securities held now, set out by class and type: nil

[warthog]

quote:Originally posted by belgarion

I notice, taumbleweed, you leeft out a salient point ...

Name of registered holder(s) of security: Estate of Mr Bruce Thomas (Peter
Thomas is co-Executor)


Haha. I had a laugh over this - good one B.

[troyvdh]

What would happen to Feltex and Cavalier if ship loads of reasonable quality and cheap carpet are imported to NZ from China.Is this a reasonble scenario....belgarion...what do you think

Why is this scenario being discounted ????? Where is macpac now????

[trackers]

well i must say the news turned out to be not to bad, i was expecting a run for the hills and the price to drop down to around 50, but the price has been quite resilient. we all know that the merger isnt necessary for the pickup of the co, but its good to see the general public holding in there too


disc: sold out at 60 for a negligable, profit..looking to get back in as the dust settles

[metro]

Im looking to buy in as well
but where will this price bottom out 0.50 ???

[Snow Leopard]

As one who lost a few cents on this one, and currently holds zilch, I suggest that you look at the charts for the last 6 months.
Basically I see a general decline with sudden jumps, both up and down, based on assorted company announcements.

Is all the bad news out or is it possible that there are further announcements to come?
Either jump in quick on any good news, and then out quicker, or wait for the company to settle down and the share price and volume to indicate the turning point.

[trackers]

well imo, mid 50s is as low as it should get, but like pt said, it should settle, and im waiting for that.

[trackers]

you think it will go that low? wow that is a big call

[TheGuv]

I guess we're forceed to wait longer for news of *how* they're doing, given the move to longer financial reporting periods. :(

Interesting question re the imports question, especially given China's general expertise at low host, high quality and volume manufacturing these days. One point to consider though - surely most foreign carpet imports would be the synthetics only? Does anyone here have some working knowledge of FTX's market?

cheers

the guv
Disc - hold FTX - neophyte.

[TheGuv]

Is Magill a complete pinhead? This from today's herald:


quote:Threat won't stop Magill attending AGM

04.11.05
By Georgina Bond


Sam Magill is clinging to his Feltex directorship and will face shareholders at the annual meeting next month, despite a resolution to vote him off the board.

Yesterday, the carpet-maker's former chief executive said that despite the threat he had no plans to give up his directorship before the December 1 meeting.

"I'm still a director of the company and I'll remain a director and present myself at the AGM," he said. "I've got a lot of experience in the business and as long as I continue to believe I can add value, I'll continue to remain a director."

His stance is somewhat of a surprise after Wednesday's comments from the New Zealand Shareholders' Association indicating that a resolution - with the company's support - had been tabled giving shareholders the ability to vote Magill off the board.

Association advocacy director Ross Dillon had thought the resolution would be redundant by the time of the meeting.

However, he said yesterday: "If he wants to make himself the target for every disaffected shareholder in Feltex, then that's fine."

Whether Magill would succeed in retaining his directorship would come down to a majority vote and "I couldn't imagine a shareholder who would vote against the resolution".

Australian-based Magill resigned as Feltex chief executive in June after the company's second profit downgrade this year, which sparked a review of all its operations to claw back value for shareholders.

Feltex shares, which sold at $1.70 each in the June 2004 initial public offering, were worth 54c last night.

Magill, a 36-year carpet industry veteran, left in August and the board terminated his contract in late September after failing to reach agreement on his severance payout.


Author
• More by Georgina Bond
• Email Georgina Bond

One wonders whether this will boost the price on day-to-day or mom&dad investors by gaining some confidence in the collective shareholders voting him off. OTOH, there's the stigma of continuing negative publicity surrounding FTX and Magill. I should imagine the board are planning their damage limitation response to this installment.

Magill's like freddy kreuger - he just keeps coming back![:o)]

At any rate, let's hope it doesn't further deflate the price. There's no accounting for the herd, eh?

the guv

PS - I forgot to mention his complete lack of good grace. It seems surprising a professional director would behave in this way.

[Jim]

I guess this the only job uncle had, or he will have to work for the Queen :D:D:D:D:D

[trackers]

I stand corrected :P

[warthog]

quote:Originally posted by belgarion

Down to 50c ... [}:)]


The market has no clue about this company, and this is reflected in the share price.

A lot of savvy people have pumped cash into this beastie up to $0.60 - we shall see how they fare as information begins to flow later this year and early 2006.

[warthog]

quote:Originally posted by belgarion

warthog, do you mean it's worth more or less?


Oh I think it is worth $0.65-0.70. Possibly a tad more for the right buyer.

But what I think doesn't really matter here - it's what the market thinks that matters, especially with no dividend in sight ;)

[The BOWMAN]

The bad news isn't finished yet.
By the time of next financial reporting season, the lot of savvy people who have pumped cash into this beastie up to $0.60 - they will realize there is no fairy tale in this one and they will depart.

[winner69]

So the man whose been involved with CSFB in the initial management buyout and a director of FTX all the way through .... including the period the diabolical events of the last few years .... is the NEW man to run this outfit.

Might have been the best candidate with the best credentials but he is not blameless for what has happened since FTX floated.

Would have thought that the Board would have taken the opportunity to truly start afresh

Spose once on the gravy chain always on it

And the way the market thinks this will be good news indeed ... knows the business, no need to train up and so get on get this thing on an even keel again ... good stuff

[zazaza]

The interveiw on ASB Business with the new boss of FTX thismorning did nothing to restore my faith in FTX, rather more of a sell why you can outlook. Ended up blaming high NZ$, can see a few holders loooking for other stocks today after that gloomy outlook.

[warthog]

quote:Originally posted by zazaza

The interveiw on ASB Business with the new boss of FTX thismorning did nothing to restore my faith in FTX, rather more of a sell why you can outlook. Ended up blaming high NZ$, can see a few holders loooking for other stocks today after that gloomy outlook.


And a few buying in. FTX up 2% at market open following this interview.

[Snow Leopard]

From the chairmans speech at the AGM

"We are in the middle of corporate restructuring. The profit for the first six months on a normalised basis is likely to be an improvement on the last six months of the 2005 financial year, but significantly down on the result achieved in the first half of 2005."

Does this translate as "some where between $1m and $12m but then we will deduct millions for one-offs" ?

[trackers]

Ya well im glad im gone and clear of this share - couple months back i was mildly optimistic but not now - hiring a director as a ceo, the mcgill witch hunt, the merger fiasco, looking at hiring staff (LOL) and now some amusing 'creative' reporting - get out while its still hanging on to 50 imo.

Will reevaluate after the 2006 financial year lol.

[The BOWMAN]

I am surprised the price actually holds on well. Doesn't the latest message just confirmed that the profit will be 2M minus per year from now on? And that is excluding the one off cost. Someone is still thinking 10M profit in half year turn around story?

[limegreen]

quote:Originally posted by belgarion

Any Technical Analysts got a view on recent activity?


I'm not sure what activity you're referring to, but the recent bounch off support suggests that FTX is closer to continuing to trend down than starting to trend up. None of the 3 trades I've marked were particularly profitable, so I'd be (and I am) much more interested in other stocks. This doesn't look like it's going anywhere (good) in a hurry.

http://img.photobucket.com/albums/v361/limegreenz/ftx5jan06.gif

[warthog]

quote:Originally posted by belgarion

- 20 MA broken
- RSI going positive
- volumes at rock bottom
- some brokers/analysts recommending this as a buy



Now we know why.

[limegreen]

quote:Originally posted by belgarion

- 20 MA broken
- RSI going positive
- volumes at rock bottom
- some brokers/analysts recommending this as a buy

Any TA's got a view?

discl: been buying [:I]


Come clean Mon! You've been buying because you thought it was cheap! A positive RSI and a break of the 20 day MA would have got you a lot of rotten trades, and one 16% winner
http://img.photobucket.com/albums/v361/limegreenz/ftx10jan06.gif

Today's action (not plotted) does look like you might have another OK trade, but it's still very much a DOG for anything other than a trader with passion for fun (and risk).

[minimoke]

quote:Originally posted by belgarion



discl: been buying [:I]



So has Godfrey Hirst!

[Lizard]

It seems positive. I would feel considerably safer holding FTX now... if GH have taken the decision to increase their holding, it will surely not be without purpose.

[TheGuv]

so GH acquired Magill's interests in a off-market trade. interesting.

[Snow Leopard]

Not a technical view but a psychological one


quote:
Those looking for a quick buck will be out in the next few weeks ... Belgie will continue to accumulate on weakness and await the inevitable ...


Past experience says to me that if there is no further news the SP will start to decline again. I would have bought to sell quickly if I had been around when the ann came out.

[The BOWMAN]

It is obvious the GH is a very inexperienced market player. Clearly they don't have strategies/plans in this game. What they have done is nothing more than following their noses. IMO Magill's action of selling at 47c(or 48c?) is more significant. It probably shows that Magill holds the same view I have, FTX does't worth more than 47c or 48c.

[winner69]

Does that announcement today actually show what the loss was ... or even the 'normalised' earnings????

[minimoke]

So sales are up, margins are down, debt is up, staff numbers are down, restructuring costs are up, inventory is down. Profit/Loss is ??

[Lizard]

This is going to cause a mass of ACC claims as analysts around the country fall off their chair laughing... What kind of result is that?!?

Personally, given the figures must be available to some people, I think FTX should be suspended from trading until they can provide something with a number in it... Debt may not have exactly "ballooned", but I suspect assets have shrunk considerably. In my mind, there is a huge question mark over the amount of shareholders equity remaining and what the debt:equity ratio must be looking like.

[Snow Leopard]

revised release with the figures is out:
a $12m loss.

[minimoke]

So, if your sales margin is 30.6% and it drops to 20.6 % is this a 10% drop in margin as asserted by FTX or a 33% drop?

[Footsie]

FTX have around $112m in debt! That is huge and should be a real warning sign to any investor. This means that the banks have virtual control. If they wanted to wind up FTX they could, of course thats not in their best interest.

Bear in mind market cap is what only $80 odd mill too

With EBITDA of of around $7m or $15m p.a they will only just be servicing debt, and still accumulating losses.
I'd sugggest thed need the currency to fall to 85c, margins to improve to 25% (by reducing costs) and sales to rise by 10-15% before this it starts to turn around.

Also the full year result will still be a loss. They wont be paying any divs for a long time. Any cash will go to paying down debt.Bank covenants will make sure of that.

FTX has a very real chance of going bankrupt. On the flipside, if this unproven management team can turn things around then yes it could be a $1 stock in two years. Optimist or pessimist.
Just because its cheap doesn't mean its a bargain. GH could just as easily walk away.

[minimoke]

quote:Originally posted by Footsie

GH could just as easily walk away.


It looks like FTX have walked away from GH. I wonder what the better proposals were and who they were from?

[winner69]

Footsie .... negative operating cash flow for the six months as well .... and stuff all investment in new plant etc .... but then when you are down and out what is the point of investing in the future

[Footsie]

I just think its got a long way to go.
and the market will still punish any negative news.

Sure, it probably wont be a National Mail, but in saying that I don't think this is a Tranz Rail or an Air NZ.

If people don't buy feltex there are plenty or alternatives.

Effectively they are in a worse position that a start up because they have so much debt. A business can only accumulate losses for so long.

There might be a capital raising if they can't manage cashflow efficiently.

a sub 30c share price is still on the cards.

[Phaedrus]

Belg, FTX has been in a downtrend for a year. It is still in a downtrend - making lower highs and lower lows (just)
On Balance Volume is essentially flat and there is no hint that any accumulation is occurring.
Do you really think that this stock is about to take off?
Do you think it has stopped falling?
It's only 2 days since you were agreeing with Footsie that "a sub 30c share price is still on the cards"
I don't think those are speculative $$$ you are holding - I think they are gambling dollars!
http://img.villagephotos.com/p/2006-2/1151662/FTX224001.gif

[Footsie]

Reasonable VOl going thru but the offer is still stacked.

Perhaps GH selling down?

Realistically there wont be any news for a while now, so where is the price going to go in light of that?

like you say Belg: six months away.

A good story for GPG if you ask me. Mr Gibbs, are you out there

[biker]

The debt will have to be reduced.Rights trading time is normallly a good entry point. Why be in now?

[Lizard]

Am interested in whether anyone thinks it would be likely they would find an underwriter for a rights issue?

[Halebop]

quote:Originally posted by belgarion

Not always. Frequently, the deal is struckered to ensure suffering shareholders get a capital gain from it.

Eh? Loss making company with a heavy debt load? Any rights issue will be structured to get cash fast from a dwindling pool of willing investors in a jaundiced market. That isn't an obvious recipe for capital gain. Its a good lead indicator for rights issue discount though.

But c'mon guys, there are many companies without the same finite and binary risk characteristics. Wait for a rights issue and see what happens. Exposure now is not a good risk / reward trade. It's simply a gamble. If you want to take a straight out gamble why not a penny dreadful uranium share? Much more upside for your risk of catastrophic loss.

[Halebop]

quote:Originally posted by Lizard

Am interested in whether anyone thinks it would be likely they would find an underwriter for a rights issue?

Assuming someone can do it for the right price probably a private client broker I think. Ironically perhaps Forsyth Barr?

If not then the banks and industry rationalization must be looming large in their rear view mirror.

[Lizard]

Halebop, agree with you re risk/reward - no way I would be buying FTX shares at the moment!

But don't discourage Belg from bailing them out with his hard-earned cash - I'd like to keep a few companies on the NZX. There is obviously good "recovery" potential in the sp once Belg and his cash-happy friends have applied the first aid...;)

[minimoke]

[quote]Originally posted by Jolly
The lack of an earnings figure was, of course, an oversight.

And this really sums FTX up - everthing just seems to be an oversight. Where is there attention to teh detial? They had no idea of their stock levels, no idea of the state of their market, no idea that their sales teams weren't out there, no idea their forecasts were based on ......?

It really isn't an oversight - it is just part of a continuing trend of incompetence at all levels!

[Snow Leopard]

quote:Originally posted by minimoke

Where is there attention to teh detial?

:) like it

[minimoke]

quote:Originally posted by Paper Tiger


quote:Originally posted by minimoke

Where is there attention to teh detial?

:) like it

I find, like the releases from FTX, that a bit of irony helps!

[winner69]

Rose tinted glasses on just a few weeks ago ... and some believed it

What a shocker (although those who read between the lines and visit stockists like Belg are not surprised) of an announcement today

Wonder the the bankers are saying today .... more than a f*** is that right, oh s*** I would say

[limegreen]

Feltex's little holding pattern is getting narrower and narrower. Will be interesting (from an purely academic point of view) to see which way it breaks). I wonder if April Fool's will be compelling this year.

http://img.photobucket.com/albums/v361/limegreenz/ftx6feb06.gif

[Footsie]

Hold onto your hats.... this stock has another profit(loss) warning in it for sure!

[Snow Leopard]

More likely a closing down sale.

[The BOWMAN]

The management hasn't got any clue about what's going on. It is just lies after lies when they start talking. The poor australian family, it would be pretty hard for them to get rid what they have got. Can't compete with Australian competitors? Then you would have no chance with Chinese competitors. It won't be good if this continues...

[winner69]

Saunders says this is a not a profit warning .... just keeping investors informed .... but hey didn't H1 margins fall from 30% t0 20% and the latest proclamation says its getting worse

Thats the margin story ..... what about the outlook

Feltex barometer (excuse) of performance is the state of the renovation market in Australia (recall the numbers quoted last year).

Current situation looking really gloomy ... according to the HIA's quarterly Renovations Monitor, the level of major renovations fell by a seasonally adjusted 13.7 per cent in the December quarter

[Halebop]

W69 I suspect the most telling aspect of that is that sales fell from a high base. I'm not certain the current state of the property market could yet be described as a low base. So is this a "normalized" environment FTX find themselves operating in? If so, Yikes!

[Westie]

quote:TRH, TWR, BCA all over again ... Probably.

Unlikley. Receivership within 18 months. Probably.

[winner69]

Feltex have never made much money ..... lost heaps of money around 2000 (before the IPO) when things were not so bright ..... suggests that they can only make decent money when everything is going alright for them .... so in 'normal' times they do not appear to have much of a business model ....

Even with all the restructuring the big picture is the problem .... NZ based manufacturing competing against the world ..... rising popularity of synthetic materials etc etc etc

So much for the infamous iconic NZ brand that was the story that sucked in so many

My views only

[biker]

quote:Originally posted by belgarion

Got to flush out the mums and dads? [}:)]

Once done ... If you're not holding, you'll miss out. ;)

TRH, TWR, BCA all over again ... Probably.

So its: "understand the macros, do the maths, and take your conjoles in both hands" stuff ... I can cope with that.

Can the mums and dads?

Trade today (pathetic) says that they can. Will be fun to see what tommorrow brings [}:)]

Another fun play leading up to a rights issue? Probably ;)

discl: not freaked ... :)

They need cash.A rights issue looks a certainty.Cheaper buying to come.

[Lizard]

I can't help feeling sceptical that anyone would want to underwrite a rights issue. At a minimum, a 1:2 issue would be needed, perhaps even a 1:1 issue i.e. holders - many of who will be feeling quite negative towards their current shareholding - would need to stump up with a significant amount of additional cash. An underwriter is quite likely to be left holding a reasonable portion on a company which at last look was still bleeding cash. I'm not sure you could come up with a big enough discount to the current sp to make that entirely palatable. I would also have thought that if an underwriter was out there, an issue would already have occurred. Hope I can be proved wrong though.

[winner69]

quote:Originally posted by Halebop

W69 I suspect the most telling aspect of that is that sales fell from a high base. I'm not certain the current state of the property market could yet be described as a low base. So is this a "normalized" environment FTX find themselves operating in? If so, Yikes!


To give you some idea here is FTX earnings history (NPAT)

1999 $5.3M profit
2000 $2.6M profit
2001 $13.2M LOSS
2002 $18.3M LOSS
2003 $6.8M profit
2004 $11.2M profit
2005 $13,0M profit
2006 ?????? $11.8M LOSS in H2 +/- H2
2007 ??????

Mar that with general economic conditions and come to your own conclusions

FTX is different and bigger beast than it was in 1999 but in spite of acquisitions, closing down factories and several restructures over the years they seem to be in the same perilous position they were in at the turn of the century

Dressed up for an IPO at he top of the cycle and the best they can achieve post IPO is a $13M profit ..... but things can change and it all might come right and the iconic NZ company becomes a great success story ..... but then again a man who has been there all the time when cumulative profits from 1999 to 2006 are ZILCH .... ask yourself

[winner69]

Wonder how bad this 'margin squeeze' is .... and what impact it will have on second half results

Sales ~$150M in H2 .... so each 1% of 'squeezed margins' is $1.5M down .... 5% is $7.5M .... yikes

And that wasn't a profit downgrade the other day .... so the 'margin squeeze' must be an illusion

[troyvdh]

..just thinking....will the institutions who remain holders allow/want this lot to go belly up ? surely they will be doing there darndest to there dosh back...by what ever means possible.

[Halebop]

Assuming they aren't just paralysed by required becnhmark weightings, how many will really be looking to throw good money after bad?

I'm not certain FTX will go under and they may even end up rewarding the brave. But the numbers are clearly appalling and it takes a keen punter to call this gamble an "investment". Few institutional investors would have a mandate to increase their exposure or the balls to go contrarian.

[Lizard]

Belg, if you want my comments, e-mail me via the ST link. I'd rather not be quoted further on this one and your own e-mail link is not working.

Cheers, Liz

PS: Interest expense = $5.7m [u]for 6 months</u>

[Snow Leopard]

quote:Originally posted by belgarion

W69 - the ups and downs would make FTX a great trading stock n'est pas?
....

As someone who lost his wine budget for months on this one before bailing out and subsequently recovering most of the same on short term trades, the only way to play this one as far as I am concerned, is to be at your computer when a positive announcement comes in, buy and then sell out again sharpish, i.e. not more than 3 days later.

[Footsie]

Liz sounds like you have something to do with FTX?
What that is, is anyone's guess.

[Lizard]

Just my experience Footsie, but companies with alot resting on shareholder sentiment get fussy when people publish uncomplimentary numbers (particularly with associated blunt commentary). Any errors in the calculations and you become fair game. Would expect ST to be safe, but Chalkie made me a little less confident about that and I have no reason to take a risk.

[Snow Leopard]

To be honest belge I am not sure why you follow this one down.
Okay picking bottoms is not a great occupation and I realise that someone has got to do it, but here we are coming up for a year after the great announcement (Do you remember what you were doing when the bulletin came out?) and we have a company which is still on life support, and showing no signs of being able to breath unassisted.
You could be making money elsewhere and then buy into any recovery if it starts to happen.

Disc: Once was, maybe will be again, but not at the moment.

[minimoke]

In a move which follows the ongoing trend of incompetence the Board have now appointed Peter Thomas (a FTX Board Member) as CEO. If you keep doing the same thing surely you can only expect the same results. Now was the time for a new CEO with bright ideas to bring this compnay out of the pits but the Board has choosen to keep on with the same old ideas.

[Snow Leopard]

I wonder whether he will be better than the Peter Thomas they appointed CEO last November. He was a board member as well....

Minimoke, this is just a ruling on last Novembers appointment.

[limegreen]

Hmmm. FTX seems to have broken through its support level. Those holding might want to consider feeling uncomfortable.

[Toddy]

The panic selling is just around the corner.

[winner69]

Bit embarrassing when you have disclose the big bosses salary as a material transaction ... &gt;0.5% of market cap they say ..... but A$420,000 plus maybe 80% more is today an exposure of nearly 1.5% of market cap ... whatever that means but it seems a big percentage

How the mighty have fallen (or was it ever mighty) .... this iconic NZ company is according to the market only worth $58M


.... and the banks are still owed $110M plus .... so Mr Thomas gets paid that much for doing what the bank managers say ... yes sir yes sir ... sack more people ... special of some of those excessive rolls of carpet ..... and no more African safaris please please please

[lanenz]

Seems like hes been offered a potentially sizable wack. Its pretty hard to justify for a non performing company. If he stops the bleeding he could be in line for 5% of the market cap. You must be joking.

[minimoke]

quote:Originally posted by Paper Tiger

I wonder whether he will be better than the Peter Thomas they appointed CEO last November. He was a board member as well....

Minimoke, this is just a ruling on last Novembers appointment.


Thanks PT - I was asleep on that one!. But proves my point given the abject performance since then.

[limegreen]

Just in case anybody has forgotten what happened last time FTX broke through support.

http://img.photobucket.com/albums/v361/limegreenz/ftx16mar06.gif

Hope Belg has some shares in Taylors...

[Lizard]

Belg, maybe you should look at POD...it's fallen more in recent times and is sitting on a similar price/revenue ratio, without the immediate debt issue hanging over it... similar potential for recovery with less risk IMO. (I don't own any and not intending to buy at present).

[winner69]

quote:Originally posted by winner69

The Altman-z score is often a good guide to the well being of any company (thats the polite language because it is generally a test for impending insolvency)

Lower the score, the higher the odds of bankruptcy. Companies with scores above 3 are considered to be healthy, scores in between 1.8 and 3 lie in a grey area, scores less than 1.8 and bankruptcy looms.

Just done this on FTX - they have a score of 2.2 which is the lower end of the 'grey area'. Of concern is that the score is worse than it was a year ago ... not surprising when you consider less sales, higher debt, higher working capital, declining margins etc.

The score not down to the 1.8 mark where bankruptcy looms but heading that way unless performance improves dramatically.

For you doubters out there - The Altman-z score for ION was 1.8 (on reported financials as well) when they went into administration ... and wasn't their share price cheap then


Redid the Altman Z Score for Feltex based on the latest financials and it came out at 1.5

According to creditguru.com such a score means "Probability of financial embarrasment is very high'

Needs a large cash injection (at least $70M in my view) along with some reasonable prospects of making decent profits before creditguru.com would be happy

Belg mate .... how do they raise $70M?

[blackcap]

Offered at 36 cents now. Who knows what is going on?

[The BOWMAN]

Now that's what I call a "DROP"!

[Snow Leopard]

Now look what you've done, winner69

[biker]

A rights issue now looking pretty difficult. This would appear to be a company rapidly running out of options,or at least options that will in any way be beneficial to current shareholders.

[Nigel]

GF has sold down half - are they likely to sell the rest??

[sniper]

quote:Originally posted by Nigel

GF has sold down half - are they likely to sell the rest??


Why do you think it is GF? They last bought in January at 48 cents off the executives who were bailing out then - a few million shares from memory.

[danchop]

quote:Originally posted by sniper


quote:Originally posted by Nigel

GF has sold down half - are they likely to sell the rest??


Why do you think it is GF? They last bought in January at 48 cents off the executives who were bailing out then - a few million shares from memory.
theres an ssh notice at 5.42pm

[tsb]

forgive my lack of knowledge
Biker do you mean that because GF have sold down from 8.72% to 4.57 - they have no confidence in the ftx direction and would not want to be locked into a rights issue. Is the timeing sudden or are FTX plans are close to implentation which have set the time frame?
The options = include a firesale in the region of 20 to 30 cents leading to "perhaps" a new cornerstone at a much lower price - then a rights issue of about 5 cents.

The CEO salary looks to be the only winner?

[The Doctor]

floated at $1.70....what a crime!

[sniper]

GF selling down? It must be all over then ....GF would be getting out only if they believe it's all over. It's a few million dollars down the tubes for them but they save their dollars to fight another day. Heck, they might yet pick up the whole of FTX for 1 cent.

Forbar and FNZC - take a bow. You helped to sell this pup to the market and it has turned into a big dog.

[warthog]

quote:Originally posted by The Doctor

floated at $1.70....what a crime!


Where is the "crime"? Or do you subscribe to a private definition of the word?

There are some investors who, regardless of how good the opportunity looks, refuse to invest in an IPO where private equity is exiting completely from the investment.

For example, Feltex.

Better to wait around a bit and see what happens after a wee while. Might not get one on the bottom floor, but there is a lot to be gained by observing, if only for a little while.

Conversely, if private equity continues to hold, then this might encourage additional investment on the basis that there is value to be had that isn't just smoke and mirrors or optimistic forecasting. BPC recently floated Goodman Fielder in a difficult market, and undertook to retain at least a certain percentage of equity.

The rest of this story is told in what happened next ;)

[Halebop]

quote:Originally posted by belgarion

So it was GF. So the question is why? I'd guess that imports are hurting their margins too. Thus they are hunkering down to protect cashflow and therefore holding FTX, in light of the required rights issue, is not too their liking. (Anyone got a copy of the GF books? It would help to shed light on this.)

Godfrey Hirst will be getting out because the holding is no good to them. FTX spurned them then continued to lurch from one bad announcement to the next. If they can't buy the whole dog why would they hold? The worst is yet to come.

[MSL]

Well if the prophecies about here are somewhat fulfilled I do express sympathy for the Chair of FTX, he is a good man. I suggest mitigating circumstances have perhaps cast him a bone he ill-deserves.

I for one got slightly intimate with FTX but I will not dwell on this other than to say my wounds have healed (sigh). [B)]

[sekrub]

Anyone got any clues as to why Godfrey Hurts (sic) didn't sell
their entire holding?

If they're so disgruntled at being jilted by FTX, why hang on to
what they're left holding?

FTX say GF's proposals no good for current FTX shareholders, but I
would like to have heard the detail of what the proposals were.

And lastly....is she going belly-up?....or, if you've got the nerve,
a bargain that obviously some buyers believe it is.

[lanenz]

quote:Originally posted by sekrub

Anyone got any clues as to why Godfrey Hurts (sic) didn't sell
their entire holding?

If they're so disgruntled at being jilted by FTX, why hang on to
what they're left holding?

FTX say GF's proposals no good for current FTX shareholders, but I
would like to have heard the detail of what the proposals were.

And lastly....is she going belly-up?....or, if you've got the nerve,
a bargain that obviously some buyers believe it is.
Might not be many sellers left. With his holding now less than 5 % he can slowly (perhaps painfully) sell the remaining of his holding without further disclosure.

[blackcap]

quote:Originally posted by sekrub



If they're so disgruntled at being jilted by FTX, why hang on to
what they're left holding?



Watching the action up close today, all I can say is that there were not enough buyers for them to dispose of more.

[sekrub]

Yup....receiving you loud and clear Belg...I think I lean
to the 2 year theory....that they'll be around, after we've been
thru the ringer a bit more.

And I'm always aware that any sharemarket investment can mean
losing the lot...hell, I had Chase Corp.....but a few good ones
too, to keep me ahead....Cheers.

[limegreen]

This is less about TA v. FA, and more about re-iterating that share price movement is not random. Companies possess certain qualities, and those qualities tend to reoccur with higher probability than the other type of quality...


quote:Originally posted by limegreen - 16/03/2006 : 2:35:15 PM

Just in case anybody has forgotten what happened last time FTX broke through support.

http://img.photobucket.com/albums/v361/limegreenz/ftx16mar06.gif



And the FTX Wealth Destruktor fights another day...

[LoD]

This fall is just so nasty... it's like boarding onto an aeroplane without knowing the engines stuffed up already.
It will take a LONG time for Feltex to heal its wounds and be ready again on the battlefield.

[Toddy]

This is great viewing.

Fortex all over again. Or is that just Feltex all over again!!!!

[Snow Leopard]

My take on yesterdays action is that GH have become totally dis-enamoured with Feltex, having been spurned completely.
Yesterdays action was to get them down below the 5% threshold before they needed to make a SSH announcement so that they dispose of the rest at their leisure.
It certainly is not going to help the share price for a while whether the sell any more or not.

Whether they reappear at a later date in the saga to rescue the damsel in distress from certain death is a real page turner.
Anyone bought the movie rights yet?

[biker]

quote:Originally posted by belgarion

sekrub, Good on ya. Keep watching. It ain't all over yet.

Blackcap, Thanks for the info ... Any hint where yourself or others see a risk / return point worthy of entry?


After a recapitalisation and balance sheet restructure,...if it happens.Not worth a punt at least until then IMHO

[COLIN]

quote:Originally posted by Paper Tiger

My take on yesterdays action is that GH have become totally dis-enamoured with Feltex, having been spurned completely.
Yesterdays action was to get them down below the 5% threshold before they needed to make a SSH announcement so that they dispose of the rest at their leisure.
It certainly is not going to help the share price for a while whether the sell any more or not.

Whether they reappear at a later date in the saga to rescue the damsel in distress from certain death is a real page turner.
Anyone bought the movie rights yet?


A good take on the situation. Presumably GH is now quietly disposing of the rest while there is still something to be retrieved - looks like they have found a few would-be "bargain hunters" this morning but I sure wouldn't want to take such a huge gamble. I have seen too many of these sorts of scenarios in days gone by, and experience has proved that it is just not worth holding on. Tower, AMP, etc were quite different as they were never going to go down the gurgler, but a highly indebted carpet manufacturer in a highly competitive world............??????????
GH will no doubt be interested in picking up pieces of the enterprise in due course, but at huge discounts to the carrying value in FTX books.

[TheGuv]

From today's business herald...

Feltex abandoned by Godfrey Hirst

21.03.06

Troubled carpet-maker Feltex has been abandoned by a potential white knight, with rival Godfrey Hirst announcing yesterday that it has almost halved its stake in the New Zealand company.

Godfrey Hirst issued a substantial shareholder notice to the stock exchange, saying it had reduced its stake to 4.57 per cent from 8.72 per cent between March 14 and March 20.

The news explained an aggressive sell-off in the stock, with Feltex shares tumbling sharply in the past week to close yesterday down 12.5 per cent, or 5c, at a fresh low of 35c.

This time last year, the shares were worth $1.56.

A series of profit downgrades and a senior management rout a year after listing in June 2004 at $1.70 have left the firm in tatters.

Last month, Feltex reported a first-half loss of $11.83 million.

Privately owned Godfrey Hirst, Australia's biggest carpet-maker, emerged as a potential saviour last year and again in January when it boosted its stake from 5.78 per cent to 8.72 per cent in an onmarket stand.

But last month, Feltex said talks between the pair had been terminated.

The potential deal was not seen in the "best interests" of Feltex shareholders.

Godfrey Hirst had designs on a merger with Feltex, which would have resulted in a reverse takeover by the Australian firm and a backdoor listing.

Feltex declined to comment on yesterday's share activity.

Godfrey Hirst finance director Jim Walsh wasn't immediately available for comment.

- NZPA

[minimoke]

John Feeney still has faith, buying more at .44. Is this a sign of confidence in the company or an indication of the depth of intellect on the Board?

[sekrub]

Please also be aware that I have just a toe in the water at present ... I can and will buy big when the price meets my risk/reward target ... It is far from it at present.

Belg....care to share with us what price FTX, in light of it's
little clawback today (Tues), would have to reach before you put
more than just your toe in the water?

[blackcap]

quote:Originally posted by minimoke

John Feeney still has faith, buying more at .44. Is this a sign of confidence in the company or an indication of the depth of intellect on the Board?


I tend to agree with the latter :)

[sekrub]

Belg...a most comprehensive and logically presented analysis.

Thank you.

[lanenz]

Total shares turnover is about 2%. Im guessing that GH sold down about another 2.5m or so shares today. . That will still leave around 4-5m shares GH needs to dump. GH wants out IMHO so more selling to come over the next few days.

[blackcap]

quote:Originally posted by lanenz

Total shares turnover is about 2%. Im guessing that GH sold down about another 2.5m or so shares today. . That will still leave around 4-5m shares GH needs to dump. GH wants out IMHO so more selling to come over the next few days.


Wouldnt be too sure about your figure of 2.5 mill today. I reackon a lot less. So still more to sell. If anything wouldnt they want the banks to get scared?

[lanenz]

Fair call blackcap. You may be right and as you have pointed out there may be more selling to come than i am saying in my previous post. The flip side is that there appears to be quite a bit of support around this level so there are speculators out there believing there is some value at this price. If there can be about 7 plus million shares traded over the next 5 working days around this price then I would expect some good short term gains out of this stock once GH is flushed out. Im still not ballsey enough to punt on it and be the patsy though.

[Toddy]

ForBar under their mum's and dad's accounts to save what is left of their investment.

[blackcap]

quote:Originally posted by Toddy

ForBar under their mum's and dad's accounts to save what is left of their investment.


well whoever it was were Maquarie clients. Parcel done in an on market marriage.

[The BOWMAN]

quote:Originally posted by blackcap



well whoever it was were Maquarie clients. Parcel done in an on market marriage.


Maquarie believes the price will be $0.60 in 12 months time.

[lanenz]

quote:Originally posted by The BOWMAN


quote:Originally posted by blackcap



well whoever it was were Maquarie clients. Parcel done in an on market marriage.


Maquarie believes the price will be $0.60 in 12 months time.
GH doesnt.

Interesting developments. I think the GH must have pretty well dumped the lot. Which way will the wind blow from here? Short term looks good IMHO

[TheGuv]

Here's the text from that article, such that we can look back at this in 12 months...

Godfrey Hirst unravels Feltex stake

24.03.06


Godfrey Hirst is thought to have exited the last of its stake in troubled carpet-maker Feltex yesterday.

On Monday, the Australian firm said it had almost halved its stake to 4.57 per cent from 8.72 per cent.

Shareholders owning less than 5 per cent of a company are not required to notify the exchange when they sell down their holdings, but a large tranche of Feltex shares were crossed just before the close of trading by Macquarie, the broker who acted for Godfrey Hirst on Monday.

Market commentators said the most likely seller was Godfrey Hirst.

Curiously, shortly after the 4pm sale, Macquarie stepped into the market again - this time buying Feltex, indicating another player saw value in Feltex at these levels.

Feltex, which plunged to a fresh lifetime low of 35c on news of Monday's selldown, recovered 2c yesterday to close at 37c. Brokers said the company, which generates the lion's share of its earnings in Australia, was in a good position to benefit from the recent fall in the dollar.

Last month, it reported a first-half after tax loss of $11.83 million - down almost 200 per cent on the year before.

A foray by Godfrey Hirst seemed doomed when Feltex said the potential deal was not seen as in the "best interests" of shareholders.

- NZPA

[Lizard]

Yes. Trading looks interesting. Removal of the GH stake might have made it more attractive elsewhere. But still not cheap enough for the risk IMO. And the opportunity cost from having money tied up in FTX would be rather high at the moment too...

[tsb]

I asked feltex what hirsts offer was now that it was canned - never got a reply though

[Halebop]

quote:Originally posted by MoSteph

Question - when GH bailed, who had the balls to take their holding?
I have trouble believing that much was sold without some of the big boys being invovled...


8.72% of a $57m company is around $5m. This sort of number doesn't require institional investors to offload on. There are plenty of small investors lining up early in an attempted contrarion play. FTX fails the average institutional mandate hurdles so you'd expect it to be sold in one or two blocks were it to go to a big investors because few would be takers. If it went in a big block you could also expect to see a follow up substantial shareholder notice.

The most likely "positive" outcome from Godfrey Hirst's sale is that they are playing a tactical game of cat and mouse by reducing their holding below the disclosure level. I'd rank this only the slimmest chance. The big boys have walked away from the table, leaving the little ones to place their bets.

FTX have earned their dog rating with dog performance. There are easier ways to make money that don't involve such a high chance of catastrophic loss.

[minimoke]

quote:Originally posted by tsb

I asked feltex what hirsts offer was now that it was canned - never got a reply though

And don't forget there were other offers the FTX board were supposedly considering not just GH's. These were apparently less advantageous compared with GH. Anything would have surely been better than continuing with the current Board - and therein probably lies one of the answers. It has little to do with adding value to the owners but more about a job security programme for the Directors.

[tsb]

dunno who is worse the NZX or feltex!


FTX
20/04/2006
GENERAL

REL: 1730 HRS Feltex Carpets Limited

GENERAL: FTX: NZX announces settlement of Continuous Disclosure inquiry

On 1 April 2005, Feltex Carpets Limited announced to the market that it
expected its net profit after tax for the financial year ending 30 June 2005
to be significantly below the previous projection.

NZX Regulation has been investigating whether that announcement was
sufficiently timely to meet the Continuous Disclosure obligations in the
Listing Rules. NZX Regulation has completed a thorough investigation of this
matter involving analysis of Feltex management reports and sales data;
examination of Feltex board papers and minutes; review of other information
provided by Feltex on the matter; and interviews of several Feltex managers.
Feltex has co-operated fully with that investigation, and answered all the
NZX's requests on a timely basis.

As a result of the investigation, NZX Regulation considered that the
management of Feltex was in possession of material information that should
have been disclosed to the market prior to the actual announcement made on 1
April 2005.

Feltex disputes that view and believes it has complied fully with the
continuous disclosure rules.

NZX Regulation and Feltex have reached a settlement under which Feltex will
pay a minimum total amount of $150,000 consisting of a contribution to the
NZX Discipline Fund and payment of NZX Regulation's costs arising from the
enquiry. The amount of $150,000 will be increased by the extent to which the
costs of NZX Regulation and NZX Discipline exceed $85,000. The settlement
does not involve any admission of liability by Feltex. In accordance with
Rule 10.1 of the NZX Discipline Rules, the settlement has been approved by
NZX Discipline on certain conditions, and these conditions have been met.

NZX Acting Head of Regulation Simon McArley said:

"The continuous disclosure rules are an integral part of the Listing Rules.
NZX Regulation has therefore carried out a thorough investigation of this
matter.
NZX Regulation recognises that a lengthy and costly disciplinary process may
not serve the best interests of the New Zealand capital market when the
matter is capable of being resolved by settlement.

The settlement reached in this case achieves the objectives of ensuring
ongoing integrity of the market in a timely and cost effective manner.

As a result of this matter, NZX intends to update its continuous disclosure
guidance note to include comment on the steps that should be taken by a NZX
Issuer to meet the requirements of Rules 10.1.1 and B1.1.1 when the Issuer
experiences a significant decline in its performance against market
expectation and when announcements in the decline in performance should be
made in this context.

Feltex Chairman Tim Saunders said:

"This is one matter carried over from a very trying year. The Board acted
promptly to address those difficulties. In particular, the Board appointed a
new Chief Executive, Peter Thomas, who has been working with the senior
management to introduce new systems into Feltex, including a new reporting
structure to the Board. The Board has full confidence in the present
management team, and supports the new reporting structure. The Board is
concerned to avoid the distractions of a lengthy inquiry, and the
considerable costs that would be incurred in such an inquiry by Feltex. The
settlement of this matter allows the Board and the new management team to
close the file, and to remain focused on the challenge of restoring value to
the Company and its shareholders."

[sniper]

That's sad - poor FTX shareholders having to pay for the Board's 'inadmission of guilt'.

That's after losing big money already from gross mismangement.

[winner69]

quote:Originally posted by sniper


That's sad - poor FTX shareholders having to pay for the Board's 'inadmission of guilt'.

That's after losing big money already from gross mismangement.



...... esp when you think about where the dosh goes to .... ha ha

[Snow Leopard]

quote:Originally posted by sniper


That's sad - poor FTX shareholders having to pay for the Board's 'inadmission of guilt'.

So true. We grieve for belgarion especially ;)

[trackers]

I find that situation bizarre - the people that should be reimbursed the $150k is the holders of shares on the day that announcement came out!

what a joke.

Disc: dabbled in FTX AFTER, not BEFORE lol.

[blackcap]

Remember though- shareholders elect the board and are thus ultimately responsible for what the board does...

No use in whinging here lads

[trackers]

Yes indeed, and as I mentioned, I wasn't a holder at the time in question (nor have I ever made a loss on FTX)

What I mean to point out is, this lack of information to the market ONLY affected people who were either holders of shares at the time of the delayed announcement - particularly recent purchasers of the stock who wouldn't have brought given full disclosure. So to make amends for this, FTX pays the NZX a sum? seems a little counter-intuitive paying reparations to the non-harmed, rather than the harmed.

[winner69]

I'm still watching the price drifting down Belg .... but I don't think the market environment has changed for the good yet so guess they would struggling to make a bob

One day maybe I might be a FTX shareholder .... but not just yet

Think they only do half year reporting now so some months away .... unless something happens .... one way or the other

[DCski13]

The question is: why and when to buy. Will manufacturing in China forces prices down such that Feltex/Cavalier/Godfred can't produce economic volumes/maintain prices and will they all become resellers (recall that Cavailier was down and Godfred is looking to merge/off-load family holdings).

Does one buy before the next 6 monthly result or at some other event be it broker analysis/market rumour or a degree of common sense or some other measure.

[clearasmud]

I wouln't touch this till after the recapitalisation.

I read somewhere that NZ is competitive in carpet manufacturing.

p.s CAV's chart is looking very promising!

DYOR

Regards,
Clearasmud.

[biker]

After a friend's enquiry to the Company,apparently Feltex have sold their Melbourne property.Anybody know what they got for it? Should have helped to reduce a bit of debt. I'm surprised their hasn't been an announcement.Hopefully more good news is in the pipeline.

[The BOWMAN]

quote:Originally posted by biker

After a friend's enquiry to the Company,apparently Feltex have sold their Melbourne property.Anybody know what they got for it? Should have helped to reduce a bit of debt. I'm surprised their hasn't been an announcement.Hopefully more good news is in the pipeline.

What do you mean by "more good news"? Has there been any "good" news that I missed?

[Lizard]

Update out. Translation (tongue in cheek) is in red:

"Market conditions for Feltex Carpets remain consistent with those reported in its March 2006 Market Update. Market conditions are still very competitive and profitability, whilst improving, is yet to reach the levels that we are seeking. The recent weakness in the New Zealand dollar is having a positive impact on the Company's profitability. " The market is still very bad.

"For the 2006 financial year, we anticipate reporting EBITDA of $20 million to $21 million after normalising the result by eliminating actual costs incurred due to restructuring and one off corporate costs. If current exchange rates had applied for the full year, the result would reflect an EBITDA of $25 million to $26 million." Our forecast normalised EBITDA for the second half is actually worse than the first half ($12.5m), despite favourable exchange rate movements

"Improved retailer confidence is now starting to show through in a stronger trend in the Company's forward sales order book. However, it has taken longer than anticipated to regain this confidence following the disruptive corporate activity surrounding the Company from June 2005 to February 2006. While, as expected, the third quarter's sales and margins proved difficult, our sales and margins for April and May were encouraging and in line with our expectations in the current market conditions." We would like the share price to be higher

"The Company is evaluating and implementing several initiatives to reduce debt and continues to improve plant and asset utilisation within its manufacturing operations. Feltex is working closely with the Bank to restore debt to historical debt servicing levels. We are also evaluating initiatives to raise new equity that will be used to further reduce debt and are reviewing the sale of certain non-core assets. Asset sales targeted to realise $25 million have been identified and actual proceeds to date amount to $6 million." We have had to sell more assets to keep the bank happy. We may have sold them below book value - if we had made a profit on sale, we probably would have wanted to talk about that. Now that we have paid the interest bill, the banks are still concerned and our only option is to raise more capital, despite the current low share price. We would like you to help us out with this by pushing the share price up.

[Toddy]

Lizard

Didn't they mention that Fbar are going to have a whip around their trusting clients.

[biker]

Here is the announcement without the negative interpretations.Looks like the company isn't going out of business after all.Nice to be in profit already on this high risk number.


FTX
07/06/2006
FORECAST

REL: 0900 HRS Feltex Carpets Limited

FORECAST: FTX: FELTEX UPDATE

Market conditions for Feltex Carpets remain consistent with those reported in
its March 2006 Market Update. Market conditions are still very competitive
and profitability, whilst improving, is yet to reach the levels that we are
seeking. The recent weakness in the New Zealand dollar is having a positive
impact on the Company's profitability.

For the 2006 financial year, we anticipate reporting EBITDA of $20 million to
$21 million after normalising the result by eliminating actual costs incurred
due to restructuring and one off corporate costs. If current exchange rates
had applied for the full year, the result would reflect an EBITDA of $25
million to $26 million.

Improved retailer confidence is now starting to show through in a stronger
trend in the Company's forward sales order book. However, it has taken
longer than anticipated to regain this confidence following the disruptive
corporate activity surrounding the Company from June 2005 to February 2006.
While, as expected, the third quarter's sales and margins proved difficult,
our sales and margins for April and May were encouraging and in line with our
expectations in the current market conditions.

The Company is evaluating and implementing several initiatives to reduce debt
and continues to improve plant and asset utilisation within its manufacturing
operations. Feltex is working closely with the Bank to restore debt to
historical debt servicing levels. We are also evaluating initiatives to
raise new equity that will be used to further reduce debt and are reviewing
the sale of certain non-core assets. Asset sales targeted to realise $25
million have been identified and actual proceeds to date amount to $6
million.

End

[DCski13]

So when can you tell at what point to buy in?

Currently the banks are compeling FTX to reduce debt thru the sale of non-core assets. At some point in the future, this will cease as to continue would effectively mean the banks are liquidating the company, and dam the sharesholders (this could still happen). For FTX to futher reduce debt it will need to raise funds via an issue of equity. It is at this point that turnaround has been reached for income and equity growth, and it is at that point the banks will, or should, swap debt for equity. This should be the time to buy. In addition, one should also see fund managers taking a steak.

Re the suggestion tha Fbar approach it's clients re a new issue is nonsence. It's simply not necessary re argument as above.

[Snow Leopard]

Biker: If you are going to wear rose tinted glasses at least give them a clean. There is many a true word spoken in jest.
That $20-21m still needs the I and D removing from it and at half year they already had $15m of restructing costs and I would be very suspicious of that "one off corporate costs" in this announcement.

You have raised here the issue of dilution of existing shareholdings through further equity raising.

OK so the company will probably survive but whether you retain your "nice profit" is open to debate.

[Snow Leopard]

quote:Originally posted by DCski13

So when can you tell at what point to buy in?

When you are looking back at what actually happened.


quote:
Currently the banks are compeling FTX to reduce debt thru the sale of non-core assets. At some point in the future, this will cease as to continue would effectively mean the banks are liquidating the company, and dam the sharesholders (this could still happen). For FTX to futher reduce debt it will need to raise funds via an issue of equity. It is at this point that turnaround has been reached for income and equity growth, and it is at that point the banks will, or should, swap debt for equity. This should be the time to buy. In addition, one should also see fund managers taking a steak.

So, doing research around the restaurants?


quote:
Re the suggestion tha Fbar approach it's clients re a new issue is nonsence. It's simply not necessary re argument as above.

Well I can see there is very little left for you to learn.
You would not care to contribute to the thread (http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=23296) created to answer your earlier question on this forum, I suppose?

Grrhh.

[Lizard]

I would like to crunch some numbers on what FTX shares might be worth. Unfortunately, I'm a bit strapped for time. So to kick off discussion, I'll just take a quick shortcut...

Seems to be popular these days when buying a business to refer to what EBITDA multiple a business is being bought on. Typical multiples I've seen of late have been 4.5.-5.5. I guess based on forecast normalised EBITDA, that values the Feltex business at around $100m. Then all you have to do is subtract their existing debt...which last I saw stood at around.... $113m.

Next please [}:)]

[DCski13]

Hm... point, or points, noted. Thank you for the 'thread'. We (I) venture onward.

[biker]

quote:Originally posted by Paper Tiger

Biker: If you are going to wear rose tinted glasses at least give them a clean. There is many a true word spoken in jest.
That $20-21m still needs the I and D removing from it and at half year they already had $15m of restructing costs and I would be very suspicious of that "one off corporate costs" in this announcement.

You have raised here the issue of dilution of existing shareholdings through further equity raising.

OK so the company will probably survive but whether you retain your "nice profit" is open to debate.



Fair comment PT.I did give them a clean and took some profits today or rather reduced my buy-in price on the rest.Still think the capital raising should provide another buying opportunity.

[Snow Leopard]

quote:Originally posted by Lizard

I would like to crunch some numbers on what FTX shares might be worth. Unfortunately, I'm a bit strapped for time. So to kick off discussion, I'll just take a quick shortcut...

Seems to be popular these days when buying a business to refer to what EBITDA multiple a business is being bought on. Typical multiples I've seen of late have been 4.5.-5.5. I guess based on forecast normalised EBITDA, that values the Feltex business at around $100m. Then all you have to do is subtract their existing debt...which last I saw stood at around.... $113m.

Next please [}:)]


Difficult one.

Having crunched the numbers from today's announcement and had a look at the half year figures I believe the following, with no great certainity,
That the actual (IFRS) loss will probably be about the amount of the one-offs this year. i.e. That the 'normalised' NPATA will be near zero.
That cash flow may be negative.
Note: according to the half year; financing costs were $5.7m, it seems to me that they are paying a premium interest rate.

Now going forward and projecting for next year, which to be honest is what you want to make it.

The very best number assumes that:

they can do $25m normalised EBITDA
that they have sold the other $19m of assets that they don't think they need
no more restructuring costs
and no tax to pay because of this years losses

and I arrive at a profit of:
$9.3m, an eps of 6.2c.

I don't actually believe they can do that well.
For 2008 maybe as above, after that they start paying tax again and then dividends.

Next please [}:)][}:)]

Disc: The above post may be best filed in the fiction section and Paper Tiger accepts no responsibility whatsoever for any injuries or other hurt caused by use of said post in any way. Please consult your own doctor before swallowing this.

[Snow Leopard]

probably unimportant given that the above post is based on guessing and that hopefully no-one will be so cruel to refer to it come full year this year let alone further down the track but....

As Feltex have adopted IFRS your reported losses are apparently reduced by a "tax credit", so the reported loss is approx 67% of the full loss. (The IRD will not actually give you money back).

Thus when you move back to a profit situation the accounts would reflect the tax paid situation, (despite no money being due to the IRD, until you have eaten through your cumulative losses).

So the line

"$9.3m, an eps of 6.2c"
should read
"6.2m, an eps of 4.1c"

Thought I would clear that up for my own satisfaction. :)

[The BOWMAN]

Well, one more BAD announcement for FTX. But obviously the market was expecting even worse ones.

[Lizard]

PT, I think your numbers look fine. Though agree that there is a huge range of possibilities for EBITDA going forward. A cautious view might be to take the $9.0m normalised EBITDA the last announcement appears to forecast for the second half and project that over two halves.

Also, not sure if you allowed for any reduction in EBITDA from the sale of $25m assets - it would seem wise to assume they made some contribution e.g. rental paid or saved.

The other question is how much equity will the banks want them to raise? As I understand it from analysts reports, the early covenants have been renegotiated, but if they want to return to them, then the key criteria were along the lines of:

EBIT/Interest cover &gt; 2.5x Debt/EBITDA &lt; 3.5x Shareholders equity &gt; $65m

Which suggests they will be looking for debt reduction to $60 - $80m? So equity raising needed is probably at least $10m, but $30m might be desirable. Dilution by 30m - 100m shares, but with some savings in interest added to NPBT ($1m - $3m).

Given the positive reaction to yesterdays announcement, it adds more weight to the argument that they can successfully raise sufficient equity to trade their way through. However, I think Belgarion is hugely optimistic in assuming that they make a rapid return to $15m NPAT and that the market is willing to project this upside in a timely fashion such that he gets an appropriate return - counting the many months he has already waited.

[Snow Leopard]

Lizard, I did not do a detailed analysis and I did say it was the most optimistic I could come up with.

Traditionally isn't the first half of the year the more profitable for Feltex?
Also you can expect them to be getting their act together better next year, if they don't then they are lunch.
On the negative side the market for carpet is not expected to get any better next year.

With regards to debt reduction, I have assumed the status quo in my figures which is unrealistic I know, but in the real world I would expect a large amount of share dilution. That makes holding this for more than a few hours a dangerous exercise in my book.

I also see belgarion's $15m for 2007 as a triumph of optimism over reality.

[Lizard]

Was not a criticism PT. Just wanted to expand on it seeing as Belg appeared to have taken your eps figure of 4.1cps to imply that it is cheap...

Agree that the first half of the year should normally be more profitable, so my "cautious" view is possibly just the other extreme.

[Snow Leopard]

Yes, perhaps giving an eps was a bad idea.

Issuing new equity should raise the profit (through reduced debt) but dilute the profit. The dilution will almost certainly outweigh the profit gain and reduce eps.

When we know what is going to happen on the equity steaks;) then perhaps we can start to value the share with a better degree of accuracy.

PS No criticism was taken :)

[DCski13]

Ha ha!

[The BOWMAN]

quote:Originally posted by belgarion

It alway does. You can always trust the market to overreact. What is they say? Fear and Greed? :)

On the other hand, it is probably nothing to do with the announcement as it is missing large amount of details that it hardly means anything. I would say it is still the greed that is driving the force.

[biker]

quote:Originally posted by Lizard



.......Which suggests they will be looking for debt reduction to $60 - $80m? So equity raising needed is probably at least $10m, but $30m might be desirable. Dilution by 30m - 100m shares, but with some savings in interest added to NPBT ($1m - $3m).



2 for 3 at 30cents would raise about 30mil.
I'm all out now,looking for better buying with the recap.

[Snow Leopard]

belgarion, you really must get that tick in your eye sorted.

[Snow Leopard]

Cavalier Bremworth is set on battling for a bigger share (http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10385799) [of the Australisian carpet market].

Sell, sell, sell ;)

[Snow Leopard]

History would suggest that if want 32c then you need to wait patiently for two months and hope that the company does not make any announcements in that time.
Good or bad announcement does not matter, FTX shareholders are generally so desparate that they would bid the stock up if receivership was announced.

[Snow Leopard]

history be damned. 33/34c
Perhaps belge is selling out?

[Snow Leopard]

Trading halt pending two announcements.

[port hills]

1st announcement:
Things aren't as bad as we thought.

2nd announcement:
They are much worse. :D

[Lizard]

GPG to the rescue perhaps?

[Snow Leopard]

I am more interested to know what the NBR said

[port hills]

quote:Originally posted by Paper Tiger

I am more interested to know what the NBR said


What have I missed, how come you know the NBR said something but don't know what it said?

[Snow Leopard]

http://stocknessmonster.com/news-item?S=FTX&E=NZSE&N=133074 last paragraph ph.

[port hills]

Cheers PT

[D_Pick]

quote:The Company has requested the NZX place a trading halt on FTX securities
pending a further announcement from the Company today commenting on the
article that appeared in this morning's National Business Review.


Those NBR people must have said something really really bad... well at least bad enough to keep a tading halt on Feltex securities.

I guess FTX doesn't want to have to pay further compensation to NZX if insider info is in the public domain

[port hills]

Why don't one of you plonkers go buy a NBR and tell us what it says.
I'd buy it myself but I would have to sell hundreds of NEOs to do it! [xx(]

[Snow Leopard]

how to make friends and influence people:

quote:Originally posted by port hills

Why don't one of you plonkers go buy a NBR and tell us what it says.
I'd buy it myself but I would have to sell hundreds of NEOs to do it! [xx(]


for the benefit of everyone except port hills (no crissy card for you this year) Stuff's take on this (http://www.stuff.co.nz/stuff/0,2106,3709930a13,00.html)

[glennj]

Have a look on the other channel.
Breach of covenents, capital raising etc

[Gryffyn]

I guess they couldn't sweep this one under the ...

[Halebop]

quote:Originally posted by Gryffyn

I guess they couldn't sweep this one under the ...

SNORT

[Cooper]

quote:Originally posted by Gryffyn

I guess they couldn't sweep this one under the ...


Nice one... :D

[D_Pick]

How much dilution will a new cornerstone shareholder create for existing FTX shareholders?

Say new corner shareholder takes 25% equity. Then existing equity shareholders end up with 75%-80% of their previous value.

Current market price (b4 trading halt) was 36 cents times 75-80% equals 27-29 cent market price per share post trading halt. Anyone else have a post trading halt valuation?

belgarion will you be selling on this news or buying? FTX's risk premium has just jumped again.

The next three weeks could be bumpy, especially if the due diligence doesn't result in an attractive outlook for carpet sales over the next couple of years.

port hills from the NEO.ASX six month chart you might be better off investing in NBR's and trying to sell then secondhand for a discount.

[Westie]

quote:I guess they couldn't sweep this one under the ...

& these latest announcements are promising to pull the rug out from under the share price

[port hills]

D Pick
you may be right but I'm better off than many NEO gamblers as I did my buying yesterday, not six months ago.

PT
sorry if I offended you, I was careful not to read your post or use the link provided with it.

[D_Pick]

Time is ticking


quote:The trading halt will be lifted after the release of the second announcement, which is expected to be released to the market prior to 2pm today, 23 June, 2006

[duncan macgregor]

I find it very hard to understand the logic in holding a share in a long confirmed downtrend.
This would never happen to me, the people left holding this baby asked for it. Hope it comes good but cant see it. MACDUNK

[Lizard]

I do hope the NBR article was not a result of their staff reading ShareTrader posts this time...!!!

[D_Pick]

NZX must be reading sharetrader


quote:REL: 1421 HRS Feltex Carpets Limited

HALT: FTX: FTX - Continuation of Trading Halt of Securities

NZX Regulation Announcement
Feltex Carpets Limited (FTX)
Continuation of Trading Halt of Securities

Further to the announcement released by NZX Regulation earlier today, NZX has
not yet received the second announcement from Feltex Carpets Limited (FTX),
which that earlier announcement indicated would be released to the market
prior to 2pm today, 23 June 2006.

The trading halt placed on FTX securities will remain in place at least until
release of this second announcement, at which time NZX Regulation will
determine whether or not the trading halt should be lifted.
End CA:00133091 For:FTX Type:HALT Time:2006-06-23:14:21:46

[COLIN]

I think any Sharechatters out there who have been imprudent enough to still hold FTX had better brace themselves for the worst. Inter alia, the NBR analysis (First NZ Capital input) assesses enterprise value of $100m v-a-v net debt of $123M!
It would need to be a brave "cornerstone shareholder" to take this on - that's if it ever gets past "due diligence". Better to wait for receivership/liquidation and then pick up any useful pieces.

[winner69]

quote:Originally posted by D_Pick

How much dilution will a new cornerstone shareholder create for existing FTX shareholders?

Say new corner shareholder takes 25% equity. Then existing equity shareholders end up with 75%-80% of their previous value.

Current market price (b4 trading halt) was 36 cents times 75-80% equals 27-29 cent market price per share post trading halt. Anyone else have a post trading halt valuation?

belgarion will you be selling on this news or buying? FTX's risk premium has just jumped again.

The next three weeks could be bumpy, especially if the due diligence doesn't result in an attractive outlook for carpet sales over the next couple of years.

port hills from the NEO.ASX six month chart you might be better off investing in NBR's and trying to sell then secondhand for a discount.


Sorry mate .. that rationale wont work..

The crux of the NBR article was that FTX current enterprise value (market cap plus debt) based on current (and likely future performance) is about $90M .... with debt well over $100M sort of says that market cap should be zilch

So any future capital injection will result in a massive dilution of current shareholder value .... much more than the numbers you suggest above

[kura]

To Colin & Macdunk, The only people still holding would be those who believe you only loose money if you sell your shares at a lower price that you bought them for, and if you hang onto your dogs, then you don't have to admit that you have lost anything.

Disc: This was my strategy prior to "seeing the light"

[COLIN]

quote:Originally posted by kura

To Colin & Macdunk, The only people still holding would be those who believe you only loose money if you sell your shares at a lower price that you bought them for, and if you hang onto your dogs, then you don't have to admit that you have lost anything.

Disc: This was my strategy prior to "seeing the light"


Yes. Sad, but true.

[Snow Leopard]

The NBR response announcement (http://stocknessmonster.com/news-item?S=FTX&E=NZSE&N=133107) is out.

Why did they not admit the cost ($7.1m) of the one-offs a couple of weeks ago, instead of having it dragged out of them like this?

[Toddy]

I wonder if ForBar is still pumping this one to its mums and dads supporters down south.

Anyone out there subscribe to their newsletter. Would be interested to hear what they are saying....... hold on, it'll be alright, as solid as etc

[Lizard]

Forbar had it as a Hold but believed them to be making "encouraging progress" following the June 7 announcement.

I hope Biker has now forgiven my own earlier cynicism regarding that announcement...

[Snow Leopard]

Thoughts on the day:

It has been suggested that GPG may be the potential new cornerstone shareholder. The first announcement states "a New Zealand company", I presume that precludes GPG?

<s>bilge</s>belgarion has been very quite.

Feltex is one sick puppy.

Some numbers as I see them and at this point I gratefully acknowledge the input from another source who will get full mention here if they wish
Assume the cornerstone shareholder buys in and ends up with 20% less 1 share, then in order for Feltex to calm the banks there will be a 1:1 rights issue. Again on the assumption that this is at the same price as the buy-in (to avoid upseting existing shareholders). Then all this adds upto a max buy-in price and rights issue of 25c a share. Almost certainly this will be less has the the mystery suitor will want a reasonable margin of safety.
Ignoring this years results, which will be a disaster, and assuming that the next year is no worse than this year and EBITDA next year will be $25m then what is this share actually worth? If you are really optimistic then I believe you may go for 37c a share now. I personally would not.

Disc: hold none, lost money on this as a long term hold, made a good bit back trading on the announcements and I believe I am currently impartial.

[winner69]

One story doing the rounds is that something like $50 cash injection is needed .... which is the sort of number my calcs on the table napkin at Boulcott St Bistro at lunch today came up.

That being the case getting $50M into such a distressed (Altman says embarassed) outfit means more than a cornerstone shareholder ..... and that means current shareholders will loss big time ..... again .... up to another 50% unless they participate in any rights issue

PT says 1 for 1 at 25 cents or less .... I would say that the less is more likely .... something like 15-20 cents?

But will long time suffering shareholders really want to front up with millions more

And shareholder approval might be needed .... that'll be a good meeting

This surely was the IPO of the century

Interesting times

[sniper]

According to information at hand so far: Company in breach of banking covenants. Bank now wants reduction of loan to restore debt to historical levels so equity &gt; debt. Co says debt will be $129m at year end. Equity will be about $70m.

Co is going to have to find at least $60m! No new investor is going to put in money unless it has control. And existing shareholders are unlikely to want to put in more money unless the company will be rescued.

Doesn't look like 25 cents or even 20 cents to me.

[winner69]

hey sniper was that you with your sharebroking mates at the table next to ours at lunch today?

Hell 317 million shares for a $100M company .... need a share consolidation .... price could back to $1.70 again

[Toddy]

quote:Originally posted by Lawso

A positive view on FTX by IRG (Investment Research Group Ltd) in today's NZ Herald:

LOW FELTEX SHARE PRICE COMPENSATES FOR RISK.

Feltex is one of the few recent IPOs whose shares are trading below their issue price and it just keeps falling. That issue price was itself set at the bottom of the expected range following a book-building process. Subsequently Feltex has produced an excellent result under favourable market conditions. It has a huge slice of the Australasian carpet market and clearly there is some risk in that. The strong local currency and expected downturn in the building industry here and in Australia weighs heavily on investors. But the share price is now so low and projected dividend yield so high (about 8%) the risks are more than compensated for. The company is well managed, financially sound and on target to meet its IPO forecast in the present year.
END

Comment: FTX must be good buying at its current level, IMHO, and will benefit from any weakening in the Kiwi v. $A.


Just looking back through the thread. A great NZ Herald article. 'The Company is well managed and financially sound'.

[Snow Leopard]

quote:Originally posted by belgarion


quote:Originally posted by winner69

hey sniper was that you with your sharebroking mates at the table next to ours at lunch today?


Market disclosure: I have nothing at all to do with FTX apart from being a smallish shareholder ... (who is likely to be laghing his head off soon)

He who laughs last, fails to understand joke.

Hopefully not ;)

[D_Pick]

quote:
Originally posted by winner69

Sorry mate .. that rationale wont work..

The crux of the NBR article was that FTX current enterprise value (market cap plus debt) based on current (and likely future performance) is about $90M .... with debt well over $100M sort of says that market cap should be zilch

So any future capital injection will result in a massive dilution of current shareholder value .... much more than the numbers you suggest above


As yet I haven't read the NBR article. Interested how the NBR arrived at an enterprise value (market cap plus debt) of $90M. Must locate a copy tomorrow.

[winner69]

http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10388146

Including this bit

"I think the main concern is that this isn't necessarily going to go ahead and if it doesn't the implication has been that Feltex is in quite serious danger of becoming bankrupt," the analyst said.

Maybe Hellaby are the white knight ... but then didn't they say that they wanted 'solid' companies

[sniper]

quote:Originally posted by Lizard

Update out. Translation (tongue in cheek) is in red:

"Market conditions for Feltex Carpets remain consistent with those reported in its March 2006 Market Update. Market conditions are still very competitive and profitability, whilst improving, is yet to reach the levels that we are seeking. The recent weakness in the New Zealand dollar is having a positive impact on the Company's profitability. " The market is still very bad.

"For the 2006 financial year, we anticipate reporting EBITDA of $20 million to $21 million after normalising the result by eliminating actual costs incurred due to restructuring and one off corporate costs. If current exchange rates had applied for the full year, the result would reflect an EBITDA of $25 million to $26 million." Our forecast normalised EBITDA for the second half is actually worse than the first half ($12.5m), despite favourable exchange rate movements

"Improved retailer confidence is now starting to show through in a stronger trend in the Company's forward sales order book. However, it has taken longer than anticipated to regain this confidence following the disruptive corporate activity surrounding the Company from June 2005 to February 2006. While, as expected, the third quarter's sales and margins proved difficult, our sales and margins for April and May were encouraging and in line with our expectations in the current market conditions." We would like the share price to be higher

"The Company is evaluating and implementing several initiatives to reduce debt and continues to improve plant and asset utilisation within its manufacturing operations. Feltex is working closely with the Bank to restore debt to historical debt servicing levels. We are also evaluating initiatives to raise new equity that will be used to further reduce debt and are reviewing the sale of certain non-core assets. Asset sales targeted to realise $25 million have been identified and actual proceeds to date amount to $6 million." We have had to sell more assets to keep the bank happy. We may have sold them below book value - if we had made a profit on sale, we probably would have wanted to talk about that. Now that we have paid the interest bill, the banks are still concerned and our only option is to raise more capital, despite the current low share price. We would like you to help us out with this by pushing the share price up.


Lizard - YOU are a GENIUS! Looks like Feltex was lining its long suffering shareholders for a sucker's punch!

Care to 'intepret' now the latest statement from Feltex?

My intepretation of "A successful capital raising is fundamental to the future of the company" - We are out the backdoor if you stupid peasant class buggers don't get hoodwinked again and put more money in for the directors and management to lose?

[Lizard]

IF the due diligence delivers a proposal,
IF the projected post-recapitalisation balance sheet looks healthy,
IF the rescuer is a company for whom I have sufficient respect,

THEN I may consider investing in Feltex for a 1-2 year period. I do not think I will need to rush this decision...

My views on Feltex float and subsequent prospects were covered on pg 12 - 18 of this thread.

For the catchers of falling knives and the bottom-feeders, the time to buy is coming. My conflict with Belg on this thread is that he has wasted funds unnecessarily by taking a premature position and may have encouraged others to do the same.

[sniper]

Lizard, no surprises with Belgarion - he is so transparent. He hedges his comments on falling stocks so that if it rises, he is very clever and bought plenty. If it falls, he is even more clever and have just dipped his toes in. Tranzrail and Tower showed that behaviour abundantly.

I will buy Feltex at 50 cents when I am sure that this company is on track back to $1.00. Not before then. Meanwhile, I am a bemused spectator of a clown show.

Remember the company had to pay the NZX $150,000 for non-admission of guilt on breach of continuous disclosure a few months ago. One senses another payment on the way to the NZX.

Feltex shareholder :

= [V] when stock floated.
= :(when company issued profit downgrade.
= [:p]on 7 June statement that things are turning around.
= :(yesterday.
= [xx(]..... soon?

[kura]

I heard a financial commentator on national programme (radio) yesterday, he was picking a 20% price drop when trading resumes, given there is still a chance of banks appointing receivers, I would have thought a 50% drop would be more realistic.

[tsb]

I would still like to know what Hurst was offering - but Feltex refuse to talk about it

[sniper]

"I hope kura's commentator is right. A 20% fall with significant volumes would have me smiling from ear to ear ... If kura is right, 50%, then even better !!!" Loser comment from someone who bought in too early and obviously had no clue that FTX is in seriously bad shape.:D

Analogy : Fool goes into a gunfight with a kitchen knife and yells to all that he is brave and should be called a hero when he was shot in the stomach. It's not brave - it's the action of a fool. :D

Better to wait for the fighters to shoot one another up first and then, go in and clean up with a machine gun. Now that's smart! [^]

[kura]

quote:Originally posted by sniper



Analogy : Fool goes into a gunfight with a kitchen knife and yells to all that he is brave and should be called a hero when he was shot in the stomach. It's not brave - it's the action of a fool. :D

Better to wait for the fighters to shoot one another up first and then, go in and clean up with a machine gun. Now that's smart! [^]


I suspect you are correct Adolph !
Just a matter of time, we could rule the world.

Pity Belgs comments will probably encourage others to have a punt (risk too high at moment) to me the time for a punt would be during rights trading, once we knew recapitolisation was a "done deal"

[Snow Leopard]

(Leslie Bricusse/Cyril Ornadel)

If I ruled the world
Every day would be
The first day of Spring
Every heart would have
A new song to sing
And we'd sing of the joy
Every morning would bring

If I ruled the world
Every man would be
As free as a bird
Every voice would be
A voice to be heard
Take my word
We would treasure each day
That occurred

My world would be
A beautiful place
Where we would weave
Such a wonderful dream
My world would wear
A smile on its face
Like the man in the moon
When the moon beams

If I ruled the world
Every man would say
The world was his friend
There'd be happiness
That no man could end
No my friend
Not if I ruled the world
Every head
Would be held up high
There'd be sunshine
In everyone's sky
If day ever dawned
When I ruled the world
If I ruled the world


Written before the Feltex IPO.

[warthog]

So who is the White Knight?

HBY - looking for well-run companies with sound management
GPG - looking for a company at bargain basement prices that, with the right capital and management (contributed by GPG) will prosper in a market coming around
BPC - looking for big turnaround projects
VIKING - looking for anything, really, or maybe a Lexus dealership, or something, Valhalla? Something to keep the annual salary coming in?

Or maybe it is GH after all. Unlikely, as egos would be dented and they would want their pound of flesh ...

The warthog can't see any good fits except VIKING. Vodka+broking+carpets it's looking like Mike Pero after a few drinks ;)

[biker]

A senario.(or two)
Feltex need about an 80 mil recap.
The share price drops Monday to between 20 and 25 cents.
Big-balls takes a stake - 400 million shares at 15c -$60 mil
Shareholders are offered 1:1 at 15c (150 million shares) -$22.5 mil
Total now 700 million shares,debt now(after asset sales)10 -20mil,with big-balls holding at least 57% and probably a lot more due to the underwrite.
Shareprice eases back towards 15 cents during rights trading.
Current shareholders end up with effectively 27% of their origional holding if they stump up with more cash,or 21% if they don't.
or....
Big balls is actually a gelding and the bank fornicates with Feltex.
Whichever,current shareholders will not remain virgins.
Longer term however,15c could be a cheap entry price,provided the new owners are credible, clean out the board and management and start running the Company and it's brands effectively.
For the record,when I spoke to the Company as a Shareholder,they lied and told me the Australian asset sales had been completed.

Disc. No longer a shareholder.

[Snow Leopard]

Feltex is a spectator sport:
Come up with all the cornerstone shareholders you like (Viking, really?) and recap scenarios you wish (disc: I have posted mine and when I said 25c max but a margin of safety required I was not talking a cent or two).

The main thing too realise is that to have money in Feltex at this moment in time is a seriously risky proposition and not to be under-taken lightly.

all the best

[winner69]

Scary stuff eh biker .... wasn't it only 2 years ago the public forked up with $245M to own this 'iconic' NZ company

Feltex has always been overburdened with debt .... and of that $245M the public handed over only $40M went to reduce debt .... but still left far too much.

Shareholder equity last accounts was $70M of which $30M is goodwill .... with debt well over $100M (NBR suggested it should have been $130M)

With those sort of numbers bikers figure of $80M might be right .... esp if everybody wants to start afresh with a lot less leverage balance sheet.

Even it is not $80M it has to be at least $50M .... and even that is going to painful for existing shareholders

Whatever eventuates will be on whether this new 'cornerstone' investor wants control or just some influence

I'd want control .... and would hope most of the board would resign voluntarily

[winner69]

quote:Originally posted by Paper Tiger

Feltex is a spectator sport:


... but good being a spectator .... and doing some sums etc because when the time is right becoming a participant could be a very good move

As an aside those who believed the shiney prospctus a couple of years ago would have expected EBITDA in excess of $60M this year .... seemed to have got the timing a bit wrong didn't they .... but those putting the numbers together made zillions eh

[D_Pick]

...and a shiney prospectus it was, all 148 pages of it.

Could the Vendor "Credit Suisse First Boston Asian Merchant Partners" be back sniffing around for a second helping of investment profits.

That would be '<s>iconic</s>' 'ironic' indeed

[warthog]

quote:Originally posted by winner69

I'd want control .... and would hope most of the board would resign voluntarily


The warthog has heard this before somewhere!!

[port hills]

[quote]Originally posted by belgarion

People should remember that a cornerstone holder is looking to make money. They wouldn't accept the risks associated with FTX unless they were either a) very sure of their ground and/or b) saw a huge return for taking the risk.
...



The above is true but of course there is no cornerstone shareholder at this stage just someone kicking the tyres, and with all the publicity/fear generated the last two days I think they will now be playing even harder ball than before.


Belgarion

I admire your contrarion views and balls to do your own thing.
That is assuming that you in fact practice what you preach.

I'm not involved in this one yet but when there is volitility like we shall see in this share price it gets my attention if not my money.

Good luck everyone.

[Silly Duffer]

I sit with Belgarion and are prepared to take what others consider as excess.....perhaps in some eyes reckless.....risk when selecting stocks that are well out of favour.Stock however....if they do not go down the gurgler.... that carry strong potential upside. There is no right or wrong formula for how one selects stocks.Nor in my opinion is their any perfect analysis.... despite reading commentators like posters or newspaper/net/TV who have firmly held views that I respect in outcome terms may achieve less variability in outcome.Inevitably however..... because of investors incomplete knowledge of the inner workings of an enterprise and the many uncontrollable external factors that impact an enterprises fortunes there always is outcome variability including for those who have carefully analytically studied and forecast particular outcomes. Of course those always right are those who comment for hindsight!Six months ago i would not have pitched Telecom and Waste Management where they now are.... nor had picked Rakon and Wotif to have had such strong IPO's!. I simply allocate a proportion of my portfolio to countercyclical plays and aim for an averaged return expecting winners and losers.One play through a Private Equity investment that I at the time of investment had thought was an offloaded problem child....is set to shortly return up to 10 times!.I was very wrong with that pick and in hindsight don't think I would have picked it different. It simply has ridden the boom in Mineral exploration in Australia.Been countercyclical for only part of my portfolio and not one who relies on looking back I enjoy the little bit of "wild west" fun from investing in a few out of favour stocks whilst holding at the core "Blue Chip" dividend and performance reliable Aus and NZ private and public shares.I actually have a reasonable number of Feltex shares mainly acquired during price weakness and for the near term will maintain a low profile and see how things unfold.Perhaps I may punt more.Belgarion there appears to be few of our view but time will tell whether this play was profitable or not!.

[warthog]

Well that bastion of careful thinking and good decisions Kapati Coast Sharebroker Chris Lee hooked into another bag of FTX after the first drop (having bought into the float initially) in a really clever averaging-down manoeuvre :D

[DCski13]

Hey, I've discovered this is a real hot site since the very brief time I've been on here. I've given up on NZD and findsomeone.co.nz; are there any half decent chicks out there who are willing to help resusitate a guy who's taken a beating over the last nine years; bought TEL on a recommendation of his broker a week before the guts fell out of it; still got all my hair; goes to Neru's gym in Lyall Bay; runs twice a week. But I've never owned FTX and never felt comfortable with the share. The whole fiasco reminds me of Roslyn Woollen Mills, a so called blue chip stock out of Dunedin. I recall a board meeting between Roslyn and Alliance Textiles. Alliance walked out of the meeting when the penny dropped what the guys from Roslyn were trying to do to them. As for dollar averaging; I was introduced to this by another stockbroker. You know, when you're in a hole its best to stop digging. Hm, there has to be a lesson in here somewhere but now, back to the topic in hand: I'm looking for a woman in her mid-forties, under 72kgs, about 5.4 to 5.7, non-smoker, likes to take risks ... independent means etc etc.

[Lizard]

Excluded by half an inch. Life has it's blessings....!!!

[Halebop]

quote:Originally posted by Lizard

Excluded by half an inch...

If I had a penny for every time I heard that line...

[Silly Duffer]

DCski13......you have a great sense of humour.Loved your posting. But all to their own re stock selection and as you found at an unfortunate cost....it sometimes is the luck of the draw with one's broker!. Good luck finding your ideal lady.Not easy if you believe the romantics....they reckon that the best ones are already spoken for. As regards Feltex.....maybe you are right.I'm not trying to convince others over my calls re stocks!!.But I do find some perspectives on this site very good food for thought.An earlier poster referred to Chris Lee a Sharebrokeron the Kapiti Coast. I admire this man.....he has the guts to incur the wrath of those who are light on shareholder funds,cash and a balanced portfolio and for me is consistently straightup. I read most of his twice weekly newsletters and my recollection is that he has been consistently negative on Feltex. He has an archive section on his site so I'd be interested in been referred to the particular newsletter where he reconmended Feltex.

[winner69]

Mr Lee said this last June

Disclosure : I have a sizeable holding in Feltex owing me about 90c per share. It is for sale at that price! I won't hold my breath.

http://www.chrislee.co.nz/June%20Taking%20Stock.htm

Does he still holds

[Silly Duffer]

Thanks Winner69.I applaud your accuracy in what you say.Well Chris may very well have to eat humble as for him to recover 90c.....if at all....is probably a forlorn hope!.I still respect the man for his forthright views....

[Year of the Tiger]

quote:Originally posted by DCski13

I'm looking for a woman in her mid-forties, under 72kgs, about 5.4 to 5.7, non-smoker, likes to take risks ... independent means etc etc.


I don't qualify by about a decade and a few kgs...

Well, maybe my luck is in again... ;)

[Year of the Tiger]

I don't have any FTX either...:D

[warthog]

quote:Originally posted by Silly Duffer

An earlier poster referred to Chris Lee a Sharebrokeron the Kapiti Coast. I admire this man.....he has the guts to incur the wrath of those who are light on shareholder funds,cash and a balanced portfolio and for me is consistently straightup. I read most of his twice weekly newsletters and my recollection is that he has been consistently negative on Feltex. He has an archive section on his site so I'd be interested in been referred to the particular newsletter where he reconmended Feltex.


That would be the warthog.

Mr Lee didn't reccommend FTX as such, but disclosed a shareholding at cost $0.90/share. Just goes to show - even level-headed risk-averse investors such as Mr Lee can fall foul of the power of a household name in the hands of private equity, sometimes more than once.

[blackcap]

Does this whole debacle, not give everyone a sense of dejavu?

Fletcher Forests anyone!

[danchop]

quote:Originally posted by DCski13

Hey, I've discovered this is a real hot site since the very brief time I've been on here. I've given up on NZD and findsomeone.co.nz; are there any half decent chicks out there who are willing to help resusitate a guy who's taken a beating over the last nine years; bought TEL on a recommendation of his broker a week before the guts fell out of it; still got all my hair; goes to Neru's gym in Lyall Bay; runs twice a week. But I've never owned FTX and never felt comfortable with the share. The whole fiasco reminds me of Roslyn Woollen Mills, a so called blue chip stock out of Dunedin. I recall a board meeting between Roslyn and Alliance Textiles. Alliance walked out of the meeting when the penny dropped what the guys from Roslyn were trying to do to them. As for dollar averaging; I was introduced to this by another stockbroker. You know, when you're in a hole its best to stop digging. Hm, there has to be a lesson in here somewhere but now, back to the topic in hand: I'm looking for a woman in her mid-forties, under 72kgs, about 5.4 to 5.7, non-smoker, likes to take risks ... independent means etc etc.
sound like you could be my long lost twin brother,except i found this site first and proceeded to lose all my money and then discovered nzd for a little relief with the opposite sex

[sniper]

quote:Originally posted by blackcap

Does this whole debacle, not give everyone a sense of dejavu?

Fletcher Forests anyone!


FNZC underwrote that infamous rights issue of 2 for 1 at 25 cents when FFS share price was around 55 cents. Share price promptly fell to 26 cents.

Will any broker be brave to underwrite this time round? Indications are no so the investor is in a great position to dictate terms. Otherwise, Feltex falls over.

Looking like 2 for 1 at 15 cents? [xx(]

[winner69]

quote:Originally posted by sniper



Looking like 2 for 1 at 15 cents? [xx(]



... that could near the mark ..... but 3 weeks plus is a long long long time away ... but'll give a brlg a few weeks to save up a bit to get a few rights

[winner69]

Does George have that much to throw around at the moment

[barney]

Unfortunatly I well remember the FFS infamous rights issue as Sniper puts it.To think the stupid directors at the time turned down a trade sale at around 90 cents because they thought better value for shareholders was to be had with a hugely discounted rights issue.Sadly for Feltex shareholders their directors seem to be performing with as much competence.Due to the huge amount of shares being issued in the FFS rights issue and the resulting dilution shareholders value never recovered.Unfortunatly for Feltex shareholders they are about to experience the same thing.And to think the Feltex directors could have done a deal with GH.Dejavu alright.

[kura]

quote:Originally posted by blackcap

Does this whole debacle, not give everyone a sense of dejavu?

Fletcher Forests anyone!


Now there is an ugly memory, yes I was a long term FFS holder many years ago, I wasn't after a quick dollar, and thought at the time that nothing would be a safer as a long term investment than growing trees, O how little did I appreciate that four letter word called "debt" and all the attendant technicalities that came with it, yes I must thank you FFS, it was like the "lesson I had to learn"
Yep, ugly but true, sorry for my late night rant, and yes I have been consuming the demon drink also, so good night and good luck.

[winner69]

quote:Originally posted by kura


..... how little did I appreciate that four letter word called "debt" and all the attendant technicalities that came with it, ....


Feltex has been a debt burdened company for a long time .... and debt never goes away until repaid.

Feltex has been 'controlled' by the banks over this time.... there has been very little investors money in this outfit .... like the 2001 accounts showed equity at $8M and debt at $170M+

The banks have done very well over the years .... if they get their money back ... and no doubt they will

To help the banks out Feltex issued some junk bonds (10.25% interest I believe and traded at higher yields than this)

The new capital raised in the IPO paid these bonds back but bank debt was still exorbitant .... nothing extra to develop the business

Until a recapitalisation is undertaken that reduces debt to manageable levels (even zero) there is little hope for Feltex

Geez it has 'iconic' brands but it is after all a capital intensive ANZ manufacturer competing in the global marketplace .... and MacDunk says this is not the place to be

At best Feltex is only going to be a solid performer, as a company that is. It has nothing special and is subject to local as well as competitive pressures

As such if it has a future it needs to be modestly 'capitalised' .... meaning it does need at least another $50M real money to have a decent future .... any takers?

[BRICKS]

quote:Originally posted by winner69

[quote]Originally posted by kura


..... how little did I appreciate that four letter word called "debt" and all the attendant technicalities that came with it, ....


Feltex has been a debt burdened company for a long time .... and debt never goes away until repaid.

Feltex has been 'controlled' by the banks over this time.... there has been very little investors money in this outfit .... like the 2001 accounts showed equity at $8M and debt at $170M+

The banks have done very well over the years .... if they get their money back ... and no doubt they will

To help the banks out Feltex issued some junk bonds (10.25% interest I believe and traded at higher yields than this)

The new capital raised in the IPO paid these bonds back but bank debt was still exorbitant .... nothing extra to develop the business

Until a recapitalisation is undertaken that reduces debt to manageable levels (even zero) there is little hope for Feltex

Geez it has 'iconic' brands but it is after all a capital intensive ANZ manufacturer competing in the global marketplace .... and MacDunk says this is not the place to be

At best Feltex is only going to be a solid performer, as a company that is. It has nothing special and is subject to local as well as competitive pressures

As such if it has a future it needs to be modestly 'capitalised' .... meaning it does need at least another $50M real money to have a decent future .... any takers?

DO you own any of these 69 lucky YOU

[winner69]

Bricks ... do I own any? of course not ..... just waiting for the recap/restructure ..... just like Tranzrail, Air NZ etc etc

[BRICKS]

quote:Originally posted by winner69

Bricks ... do I own any? of course not ..... just waiting for the recap/restructure ..... just like Tranzrail, Air NZ etc etc


AND TEL of co****.. [8D]

[minimoke]

There you go Belg - $0.17 - $0.22 start of day (down 53%) low enough for you?

[Contrarian]

Gidday

Off the Feltex website

Feltex Stile
Stile™ is a trademark of Shaw Industries, a Berkshire Hathaway Company

[DCski13]

It's real nice to know that women are also traders. I've been endeavouring to get my sister involued. Our father was a very good trader and more often right than wrong. He started me on the 'bug' when I was 14 with Wilson Neil.

Re FTX - Numbers v. Market presence etc. I would like to take issue with belgarion. Numbers matter.


quote:Originally posted by belgarion

FTX has been around forever and has considerable market presence, brands and consumer goddwill. It also has over 900 employees and an operation. To build what FTX has from the ground up would cost a heap and take years. Now - as people are want to do ... FTX value has been reduced 'snapshot' numbers about debt. I kinda feel people might be missing the trick here.
[}:)]


Banks et al work on a 12 monthly cycle, opportunity cost; and confidence drives businesses.

In addition, while we are discussing the fall and rise of FTX, competitors will be doing everyting they can to undermine the 'warm fuzzies' of FTX that those with a liberal view of the world like most.

[port hills]

well done to whoever bought 65k at 20c might be time to take that 25% profit. :)

PS It wasn't me.

[winner69]

... at this rate it'll be back to 37 cents by the end of the day

[port hills]

It would take real big balls to be getting in now at 29c.
Wow. [:0]

[sniper]

The big boys haven't made their move yet. Watching .......

[Gryffyn]

maybe at 25c I'd be interested but...

[Gryffyn]

make that 20c

[lanenz]

Goddfrey Hirst will be feeling rather smug right now

[D_Pick]

Tomorrow should see a second wave of selling, mum and dad investors will (pick up the morning paper) see Feltex share price down 30%, read the corresponding negative article and call their broker to place a sell order.

I'm thinking its early days for a new market equilibrium price for FTX.

Brave buyers today, if the rights issue is priced somewhere near 15 cents a share, then the current market price doesn't look so sharp

[D_Pick]

Of the 152 million odd shares on issue only 1 million odd have changed hands today.

So relatively light volume for such negative news

[Gryffyn]

uh uh - cujo is buying -pretty much the final rites really. I'll look for sub 15c noe

[D_Pick]

cujodog, what do you think of the carpet market in Australia? A very important barometer for FTX's future health

Should be a good three weeks of trading volatility in FTX shares

punt away

[D_Pick]

cujodog, living in Australia is an advantage as most of Feltax's sales are in Australia. Look out for the non Feltex branded carpets like Invicta, Redbook and Minster at your local carpet retailer

Having many good brands isn't a big positive though if the company is trying to operate under a mountain of debt

debt isn't kind to the weak

[Toddy]

Bought some on 'broker' recommendation.

Wow, cannot believe any brokers would put their clients into FTX. Maybe your broker friend has some large clients wishing to offload.

[sniper]

quote:Originally posted by belgarion

Some interesting thoughts thus far. I'd like to add further topic that seems to have avoided discussion ... probably as it is harder to quantify.

Business value ... in terms of FTX brands and existing operations and infrastructure. FTX has been around forever and has considerable market presence, brands and consumer goddwill. It also has over 900 employees and an operation. To build what FTX has from the ground up would cost a heap and take years. Now - as people are want to do ... FTX value has been reduced 'snapshot' numbers about debt. I kinda feel people might be missing the trick here.

I quite happy to encourage the doom and gloomers - It drives down the price by attributing a big fat zero to the 'business value' of FTX. Belgarion has his check book open ... Just tell me how much [}:)]


Check book open? Business value? Try telling it to RMG shareholders. :D

[Gryffyn]

quote:Originally posted by cujodog


quote:Originally posted by cujodog

Just bought some on recommendation of my broker friend.

Look forward to a "triple bagger" (whatever that means!)


Sorry I need to correct myself. I should have said on the recommendation of my "broke friend"

I apologise for the confusion:D

no broker is fine - as in he is broker than me ;)

[BRICKS]

quote:Originally posted by cujodog


quote:no broker is fine - as in he is broker than me ;)


Hee hee no one is broker than ol' Cujo!:)


IF FTX is down to cujodog level then the END is now in SIGHT.. [8D]

[warthog]

quote:Originally posted by BRICKS

IF FTX is down to cujodog level then the END is now in SIGHT.. [8D]


Wait, the warthog thinks he actually understoods something BRICKS wrote.

Well done BRICKS - it's about how far one has come rather than where one is ... ;)

[Sideshow Bob]

quote:Originally posted by warthog


quote:Originally posted by BRICKS

IF FTX is down to cujodog level then the END is now in SIGHT.. [8D]


Wait, the warthog thinks he actually understoods something BRICKS wrote.

Well done BRICKS - it's about how far one has come rather than where one is ... ;)


And about as gramatically correct and spelling mistake free as it gets!!

[BRICKS]

quote:Originally posted by Sideshow Bob


quote:Originally posted by warthog


quote:Originally posted by BRICKS

IF FTX is down to cujodog level then the END is now in SIGHT.. [8D]


Wait, the warthog thinks he actually understoods something BRICKS wrote.

Well done BRICKS - it's about how far one has come rather than where one is ... ;)


And about as gramatically correct and spelling mistake free as it gets!!


THE Sideshow is that your BEST go back to FOOTBALL Bob.. [8D]

PS, your spelling of grammatically is WRONG..[8D]