Airwork IPO

[etrader]

I've put a bid in through my broker for shares in the upcoming Airworks float subject to seeing the prospectus.

Has anyone dealt with Airworks or know more about their future listing please inform us more.

I understand they own 26 choppers, run the down down heliport and own a fleet of plains inc 6 737s plus a strong maintenance side.

[Harvey Specter]

Do you have any more details? Which exchange? IPO or pre compliance listing capital raising?

[noodles]

I've put a bid in through my broker for shares in the upcoming Airworks float subject to seeing the prospectus.

Has anyone dealt with Airworks or know more about their future listing please inform us more.

I understand they own 26 choppers, run the down down heliport and own a fleet of plains inc 6 737s plus a strong maintenance side.

This company?
http://www.airwork.co.nz/

[Snow Leopard]

I've put a bid in through my broker for shares in the upcoming Airworks float subject to seeing the prospectus.

Has anyone dealt with Airworks or know more about their future listing please inform us more.

I understand they own 26 choppers, run the down down heliport and own a fleet of plains inc 6 737s plus a strong maintenance side.

Are you talking about Airwork Holdings Limited (aka 'Airwork Group')?

Seem to remember the words 'Airwork' and 'IPO' be heard in the same room on and off for the last 4 - 5 years.

Best Wishes
Paper Tiger

[psychic]

Here's some background

http://www.stuff.co.nz/business/industries/9249114/NZX-beckons-after-Airwork-handover

Secured a big contract recently in Europe - certainly seem to be well founded and a significant player.
Would be very keen to have a look if Airwork decides to float...

[steve fleming]

One of Direct Capital's original investments, shame those guys are no longer around

[vorno]

Working on engines 'remotely' could prove a difficult challenge. I imagine that being in the heart of Europe that they could find work a lot closer at hand, possibly cheaper as well. Don't know enough to make an accurate comment.
Securing a big contract however, shows promise!

[zigzag]

One of Direct Capital's original investments, shame those guys are no longer around

I used to have shares in Direct Capital. I think they delisted because most Kiwis didn't have the patience for their style of investing. The same guys are now running a private equity outfit. Retail investors can access through the " Pohutukawafund "

[etrader]

Yes airwork is doing an IPO currently privately owned. Will await the prospectus but have put my hand up for some through my nominee holdings.

[psychic]

Yes airwork is doing an IPO currently privately owned. Will await the prospectus but have put my hand up for some through my nominee holdings.

Is there one particular Broker handling this ET? Would like to register interest (suspect so will everyone else given the frenzy with other recent floats..)

[etrader]

I've only had brief detail on it but use Craig's who have bid on my behalf.

Sure most brokers will be able to get some

[macduffy]

An announcement "expected" tomorrow?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11159594

[goldfish]

Does direct broker ever get any of these ipo's? Do i need to change brokers if i want in on any ipo's? Does craigs charge much if i just want to use them for ipo's? They seem to get the most of them.

[Harvey Specter]

Does direct broker ever get any of these ipo's? Do i need to change brokers if i want in on any ipo's? Does craigs charge much if i just want to use them for ipo's? They seem to get the most of them.
ASB and Direct only get a look in if the IPO isn't popular.

Brokerage is higher but not a major if you are a buy and hold. If you don't put much business through them, you may not get a look in on the popular IPO/placements, even if you are a client.

[Dej]

Just some interesting links on the IPO:

http://www.stuff.co.nz/business/industries/9417536/Airwork-launches-IPO

http://www.vcpost.com/articles/18300/20131119/airwork-go-public-prospectus.htm

In the second document its gives a mention of IPO price and dividends as follows:

"Details in the company's prospectus indicated that Airwork had priced its shares offered in the IPO at USD2.60 apiece. It would be listing on the New Zealand bourse by December 19 should a minimum amount of USD30 million was raised from initial order-taking. Airwork plans to use the ticker name "AWK" on the stock exchange and will be paying a USD0.14 dividend per share in fiscal year 2014 via two, USD0.07 dividend per share payouts."

[Harvey Specter]

My maths may be a bit dodgy but I work that out as a PE of 23 or 17 on a forward basis and a dividend yeild of 5% (unclear if imputed but given overseas operations, probably not fully)

[axe]

I am very new here. I have read some of the Prospectus and I am very confused by this:

Transactions with related parties of directors
Hugh Jones has agreed to the share repurchase described elsewhere in this Offer Document.
In addition, $5 million of subordinated debt provided to the Company by Airlift Holdings
Limited, a company associated with Hugh Jones, is to be repaid from proceeds of the Offer.
Hugh Jones is also the sole director and personal representative, and a trust associated with
Hugh Jones is the sole shareholder, of Airlift Trading Limited. Airlift Trading Limited owns a
Bell 427 helicopter, ZK-HVN, which is leased to Airwork Group under a commercial lease
arrangement.

[macduffy]

I am very new here. I have read some of the Prospectus and I am very confused by this:

Transactions with related parties of directors
Hugh Jones has agreed to the share repurchase described elsewhere in this Offer Document.
In addition, $5 million of subordinated debt provided to the Company by Airlift Holdings
Limited, a company associated with Hugh Jones, is to be repaid from proceeds of the Offer.
Hugh Jones is also the sole director and personal representative, and a trust associated with
Hugh Jones is the sole shareholder, of Airlift Trading Limited. Airlift Trading Limited owns a
Bell 427 helicopter, ZK-HVN, which is leased to Airwork Group under a commercial lease
arrangement.

It means that a company owned by an Airwork director - Airlift Trading - has lent Airwork $5m and that Airlift Trading has leased aircraft to Airwork. Disclosures required by the Securities Act.

[noodles]

I read the prospectus last night after seeing it mentioned in the Sunday times. They seem reasonably priced with some growth prospects.

Is anybody taking the plunge?

They will probably need some institutional interest to reach the $40 million target?

[Joshuatree]

lease find enclosed the Investment Statement containing full details of the Airwork Holdings Limited initial public offer of Shares. Deutsche Craigs Limited is a Co-Lead Manager in this Offer for which we will receive a fee. Deutsche Craigs Limited is a wholly owned subsidiary of Craigs Investment Partners Limited. Our Summary of the Offer is also enclosed. Airwork Holdings Limited is a specialist provider of services to the aviation industry, operating through a number of companies and business divisions (together ‘Airwork’). Airwork owns, operates, leases, maintains, upgrades and supports helicopters and fixed wing aircraft and provides a complete solution to clients, according to the client’s requirements. Airwork is offering up to 15.4 million new ordinary Shares at NZ$2.60 per share via a Broker Firm Offer. The Company will use all of the Offer proceeds in excess of $20 million to repurchase and cancel shares held by major shareholder Hugh Jones at the same price per share as the IPO issue price. This amounts to between $10 million and $20 million of shares. Hugh Jones does not guarantee the Shares offered. The remaining proceeds of the Offer will be used for general business purposes and to repay debt.

[Joshuatree]

Tried to drag the prospectus onto this thread but no go. Anyone else more tech savvy than me have a go. No int?

[psychic]

Yeah - I'm interested JT. Will read more tonight.
Prospectus here if others interested:

http://www.craigsip.com/~/media/Files/Investment%20Banking/Airwork-Holdings-Limited-Investment-Statement.ashx

PE 11.1, Gross div yield 6.4%

Issue of liquidity? Asset quality? About 1/2 cap raised used to purchase shares from Principal SH..

Appreciate comments

[biker]

I read the prospectus last night after seeing it mentioned in the Sunday times. They seem reasonably priced with some growth prospects.

Is anybody taking the plunge?

They will probably need some institutional interest to reach the $40 million target?

Not for me.

[Joshuatree]

Any reasons you'd like to share on share trader?;)

[psychic]

I'm in. Anyone else?

[Joshuatree]

Hi psychic it looks int on my shallow flyby, but timing isn't good for me with a bit of a correction happening here and In Aus. Maybe one of the hundreds of "Ghost" share trader members could assert them selves and share some analyzing here:cool: We know your reading everything.

[Halebop]

I have little insight into the industry so will stick with the numbers:

77 Years old - has longevity but not necessarily in precisely the same industry category it commenced
Helicopter returns look more interesting than fixed wing
Helicopter operates across Mining/offshore, PNG and Africa so potentially a risk premium built into their pricing
The IPO is releasing $15m to $25m to the major shareholder
Partly because it is a finance company as much as an aviation services company, debt financing will remain a substantial feature of the overall capital mix even post IPO (Projecting to fall to $55.8m by FY14, or 60% of equity) and they may be exposed to lumpy refinancing periods and interest rate changes.
On the little information provided, operating earnings appear to be consistently positive but somewhat volatile
A small business without much in the way of scale benefits but the flip side is this means profitable niches may be material to them.

My take; In the long run suspect it is only worth 10 or 11 times earnings. Yield is reasonable. Think the IPO is slightly greedy at 11 times but in a low yield environment could still deliver a gain on listing day. Perhaps not worth the risk?

[psychic]

Thanks Halebop. Well, we kick off at 11am. Good luck AWK, welcome to the NZX.

[FarmerHamilton]

Thanks Halebop. Well, we kick off at 11am. Good luck AWK, welcome to the NZX.

Been very quiet with little volume since moving onto the NZX. Looked quite well bid yesterday I thought and confirmed today with the buy side certainly filling up nicely and the stock having its biggest move since listing day with a 7c gain. No news but looks like could push up to $3 over the next few weeks with best offer currently $2.87

Disc: Bought 3,000 in IPO @ $2.60.

[psychic]

Hi FH. Yes been quite pleased with holding pattern so far. From the prospectus:

Key initiatives not included
in the forecast financial performance are:
• Offshore leasing contracts;
• Receipt of minimum contracted revenues from The Helicopter Line, which are currently
in dispute;
• Maintenance/ Engine/ Helicopter Upgrade contracts in offshore locations in line with
recent Certification extensions;
• Additional Fixed Wing Charter revenue from additional utilisation of the current
capacity across the fleet.

Perhaps there have been a few developments?
Oddly enough and totally out of the blue, a good mate involved with Aircraft Maint mentioned how there was this NZ Company going nuts in PNG right now with chopper supply to Miners etc. Don't know how the conversation got there but yes, he was referring to AWK.

Nice little hold I reckon...
Cheers

[etrader]

Only very small volume but a steady daily increase with a spike at close today.

Should be a steady Company to be involved with - $140 mill plus turnover.

[noodles]

I suggest you read pg 57-58 of the investment statement regarding FX rates. Can I suggest that they will struggle to make forecasts as USD and AUD have moved against them.

http://www.airworkgroup.com/_uploads/investors/Investment%20Statement.pdf

[psychic]

You are right of course Noodles but then there may be a significant offset with Capex.... ?

[psychic]

Wonder if this dispute with THL has been mentioned on the thread there and the timing...

The Company considers the chances of success on the summary judgment claim (for $2.015 million (including GST),
related to the prior years’ shortfall in the contracted minimum flying hours requirement) plus interest and costs are very
high

[noodles]

You are right of course Noodles but then there may be a significant offset with Capex.... ?

This is true. It will offset it a little. But do analysts really look at the balance sheet? They will be mostly concerned about making the earnings forecasts.

[noodles]

Wonder if this dispute with THL has been mentioned on the thread there and the timing...

The Company considers the chances of success on the summary judgment claim (for $2.015 million (including GST),
related to the prior years’ shortfall in the contracted minimum flying hours requirement) plus interest and costs are very
high

These are one-off gains and should be considered as such. Analysts will look through one-off gains and focus on underlying earnings.

[axe]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11192372.

3 news announced that it was owned by AWK.

[etrader]

7 million in cap value taken away so far.

[noodles]

I suggest you read pg 57-58 of the investment statement regarding FX rates. Can I suggest that they will struggle to make forecasts as USD and AUD have moved against them.

http://www.airworkgroup.com/_uploads/investors/Investment%20Statement.pdf

Well I got it completely wrong. They look like they will exceed forecast by $1mill. From yesterdays market update...
"Airwork Holdings Limited’s helicopter division continues to perform strongly with trading and overhaul activity further improving ahead of expectations."

Underlying NPAT after tax should now be about $12.7 mill or 25.3cps. Sitting on a FY14 pe of 11.25. Cheap???

[BlackPeter]

Wow - 517.000 shares changing owner today (2 quite sizable packages and lots of noise) ... in my books is the share currently quite cheap, looking at P/E (10.5) and predicted dividend (13 cts) ... managed to buy some more at $2.42 ...

[noodles]

Wow - 517.000 shares changing owner today (2 quite sizable packages and lots of noise) ... in my books is the share currently quite cheap, looking at P/E (10.5) and predicted dividend (13 cts) ... managed to buy some more at $2.42 ...
I have a few of these. I paid a LOT more!
The currency is a concern here. I'm looking forward to the final result in august. Might look at buying more then.

[BlackPeter]

Currency play per chance?

shouldn't the hope of a falling kiwi dollar get the SP up instead of down ? l guess they make most of their money in foreign currency .

[psychic]

:) Well done

Airwork beats earnings forecast; increases dividend
- NPAT of $9.8m up 52 percent on 2013 and 17 percent ahead of Prospectus Forecast
- Reported EBIT1 up 22 percent on 2013 and 9 percent ahead of Prospectus Forecast
- EPS of 21.1 cents, up 38.3 percent on 2013
- Final 2014 dividend increased to 8c a share, fully imputed

https://www.nzx.com/companies/AWK/announcements/254513

[BlackPeter]

:) Well done

Airwork beats earnings forecast; increases dividend
- NPAT of $9.8m up 52 percent on 2013 and 17 percent ahead of Prospectus Forecast
- Reported EBIT1 up 22 percent on 2013 and 9 percent ahead of Prospectus Forecast
- EPS of 21.1 cents, up 38.3 percent on 2013
- Final 2014 dividend increased to 8c a share, fully imputed

https://www.nzx.com/companies/AWK/announcements/254513
I love it ... another high performing stock with a short sharetrader thread! Looks like I need to buy more shares nobody is talking about;

Discl: happy holder :t_up:.

[psychic]

Cheap eh!!!

[percy]

An excellent result and a very positive outlook.

[BlackPeter]

Michael Daniel purchased another 400000 shares on market - love it:

http://www.nbr.co.nz/article/airwork-chairman-boosts-shareholding-following-bumper-result-db-p-161782

[noodles]

I love it ... another high performing stock with a short sharetrader thread! Looks like I need to buy more shares nobody is talking about;

Discl: happy holder :t_up:.

I don't think the company has done a great job at highlighting their underlying results. They should have reported underlying eps in the release.

The underlying NPAT was $13.48mil. This equates to 26.8cps. At a closing price of $2.80, that leaves AWK on a pe=10.45. The average pe on the NZX is nearly 18.

Given the currency headwinds, I think the result was extraordinary.

There was a positive outlook statement..."Airwork expects to achieve continued growth in earnings in the 2015 financial year"

Additionally, the Chairman is buying up large (over $1mill).

So I think there is some reasons for this stock to get a few more sharetrader posts.

I won't be a happy holder until the share price starts moving up!

[psychic]

I don't think the company has done a great job at highlighting their underlying results. They should have reported underlying eps in the release.

The underlying NPAT was $13.48mil. This equates to 26.8cps. At a closing price of $2.80, that leaves AWK on a pe=10.45. The average pe on the NZX is nearly 18.

Given the currency headwinds, I think the result was extraordinary.

Their was a positive outlook statement..."Airwork expects to achieve continued growth in earnings in the 2015 financial year"

Additionally, the Chairman is buying up large (over $1mill).

So I think there is some reasons for this stock to get a few more sharetrader posts.

I won't be a happy holder until the share price starts moving up!

Nice post Noodles

[noodles]

Michael Daniel purchased another 400000 shares on market - love it:

http://www.nbr.co.nz/article/airwork-chairman-boosts-shareholding-following-bumper-result-db-p-161782

And another BUY disclosure today. Accumulating!
https://www.nzx.com/companies/AWK/announcements/254795

[BlackPeter]

And another BUY disclosure today. Accumulating!
https://www.nzx.com/companies/AWK/announcements/254795

If the board continues buying their own companies shares, there might not enough be left for the public. Better be quick ...;)

Discl: owning (actually slightly overweight) and happy. DYOR

[Beagle]

They run a pretty good and professional operation at Ardmore. Company is small by market standards and PE seems about right to me for the aviation sector.
I prefer AIR. Better liquidity, lower PE and planes are safer than helicopters.

[noodles]

They run a pretty good and professional operation at Ardmore. Company is small by market standards and PE seems about right to me for the aviation sector.
I prefer AIR. Better liquidity, lower PE and planes are safer than helicopters.

I think AWK has better growth prospects with their maintenance operations. Perhaps that is why AWK commands a higher (albeit modest) pe ratio.

Additionally, Airwork does not have direct exposure to Fuel Prices

[Beagle]

I've had a fair bit to do with Helicopter operators in my career as an accountant. In my experience BK117's are an extremely complex Helicopter. There's a hell of a lot of components to go wrong and they're looking at overhauling lots of old ones and it only takes one failure of one component with catastrophic results and the company's reputation is in the toilet, followed quickly by its financial results. No company is devoid of risk and this is a small operation by international standards operating in a notoriously risky field of endeavour. I wish shareholders well. On the balance of probabilities you should do well.

[BlackPeter]

They run a pretty good and professional operation at Ardmore. Company is small by market standards and PE seems about right to me for the aviation sector.
I prefer AIR. Better liquidity, lower PE and planes are safer than helicopters.

not sure, whether I would see this is an either / or. Both companies are quite different, despite both making money with flying gear - but their client groups and markets are quite different.

AIR is mainly dependant on tourism and to a lesser degree on business travel and freight. Going well at the moment and is certainly a well run business. However it is a very cyclical business and IMHO currently close to the peak of the current cycle. As well - just remember what 911 did to the airline industry, or what MH17 did to one particular airline. Even a small (well, not so small - Island) vulcano can throw the industry into disarray. In my view quite risky business with diminishing rewards - not even considering AIR's habit of buying bad performing Australian airlines ...

AWK's customers on the other hand are organisations and companies dependant on flying gear. Oil platforms need to be supplied, S&R helicopters need to fly, no matter what the current public mood. Sure, there is competition as well, and they need to perform to high standards, but at least there is a much smaller risk that their market disappears over night due to some idiot placing a bomb or firing a rocket ...

I do like both companies, but sold my AIR shares some time ago with a nice gain. Might be back when their SP comes down below NTA again ... been there before (several times).

[Beagle]

Fair enough BP. Speaking of NTA how much IP or goodwill was creamed off in the float ?

[BlackPeter]

Fair enough BP. Speaking of NTA how much IP or goodwill was creamed off in the float ?

Good question ... and not sure - I bought them well under their floating price, but it looks like they are now back (slightly above float).

Latest balance sheet shows roughly $2M intangible assets (haven't investigated further) - not too bad compared to $88.8M equity.

If you mean the difference NTA (1.69) to SP (2.80); Yes, the ratio is 1.65 - but again, not too bad for a well performing company.

Does this answer your question?

[Beagle]

Mate, 1.65 times AIR's $1.65 NTA would have them at $2.72 :D
I don't like choppers, too many moving parts moving in too many different directions. Last time I looked, which I admit was many years ago it cost nearly ten times the price on a per capita basis to insure a Helicopter compared to a fixed wing plane. there's a good reason for that and it only takes one accident on one of those bloody old BK117's that they restore and their reputation takes an absolute belting.
That said, on the balance of probabilities you should be okay :)

[psychic]

Are you not oversimplifying AWK's operations Roger? They do a lot more than restore old BK117's out at Ardmore. Other than they share "air" in their names I don't see a great deal of similarity between the two.

[Beagle]

Perhaps so, to illustrate my point that there's a lot more risk in helicopter maintenance than meets the eye. Anyway, I'll leave it at that. Its not for me but all the best to those who hold :)

[noodles]

Perhaps so, to illustrate my point that there's a lot more risk in helicopter maintenance than meets the eye. Anyway, I'll leave it at that. Its not for me but all the best to those who hold :)

Thanks for your input Roger. It is nice to see the company being discussed.

[psychic]

At Airwork’s Annual General Meeting, to be held today, Airwork’s Chairman Mike Daniel will announce that Airwork is on target to exceed the IPO forecast tax paid profit for the six months ending 31 December 2014 by 23%, with net profit after tax now forecast to be $7.3 million.
For the full year, provided Airwork doesn’t experience any factors beyond its control, it is expected that the company will achieve a tax paid profit of about $14.5 million or 29 cents per share.
The Directors are confident that the total dividend for the 2015 financial year will be maintained at the current level of 15 cents per share.

https://www.nzx.com/companies/AWK/announcements/256645


Doing a great job. :)

[noodles]

At Airwork’s Annual General Meeting, to be held today, Airwork’s Chairman Mike Daniel will announce that Airwork is on target to exceed the IPO forecast tax paid profit for the six months ending 31 December 2014 by 23%, with net profit after tax now forecast to be $7.3 million.
For the full year, provided Airwork doesn’t experience any factors beyond its control, it is expected that the company will achieve a tax paid profit of about $14.5 million or 29 cents per share.
The Directors are confident that the total dividend for the 2015 financial year will be maintained at the current level of 15 cents per share.

https://www.nzx.com/companies/AWK/announcements/256645


Doing a great job. :)
I attended the very relaxed AGM today.

Key takeaways for me were:
1. Organic Growth in Helicopters with additional capacity at Ardmore
2. Aircraft Leasing. They have brought 6 737-400 at a very low cost. Will provide growth in FY16
3. Contracted earnings give company confidence in earnings
4. May buy some Helipro assets (but not businesses)
5. Mid-may 2015 for court case with THL

I left the meeting feeling very comfortable with my holdings.

[psychic]

Thanks Noodles. Onwards and upwards then. P/E a tad under 10, well managed, long established, nothing flashy. What's not to like.

[psychic]

Congrats to the Airwork team - another solid result announced today.
Happy holder


• NPAT1
of $7.9m up 19% on prior period and 25% ahead of Prospectus Forecast
• EBIT2
of $11.8m up 6% on prior period and 21% ahead of Prospectus Forecast
• EPS of 15.7 cents, up 48% on prior period
• Interim dividend increased to 8 cents per share
Airwork Holdings Limited (Airwork) made a strong start to the 2015 financial year. Once again the
specialist aviation solutions provider exceeded its prospective financial information (PFI) in the
prospectus for the IPO and NZX listing in December 2013 – the last period in which it is covered by
such forecasts. Full-year NPAT guidance has increased by 5.5% to $15.3m.


https://www.nzx.com/files/attachments/208621.pdf

[noodles]

Broker research has AWK trading on pretty low pe multiples
Fy15:10.5
Fy16:8.4
Fy17:6.6!

http://www.4-traders.com/AIRWORK-HOLDINGS-LTD-17606229/financials/

I look for GARP(Growth at a reasonable Price) stocks.

This fits the bill nicely.

[percy]

I believe the purchase of the 737-400s was very astute.Converting them to freighters will mean long term profitable leases,the steady cash flows of which will underpin earnings for years to come.The planes they are replacing are mostly very old, and do not carry very big loads.
With more people ordering goods on-line, courier deliveries are growing very quickly,and will continue to grow.
With leases to the likes of a joint venture with Freightways in NZ ,and a lease to Toll in Australia,plus planes leased to Europeans makes the analysts projections are very achievable.

[noodles]

I believe the purchase of the 737-400s was very astute.Converting them to freighters will mean long term profitable leases,the steady cash flows of which will underpin earnings for years to come.The planes they are replacing are mostly very old, and do not carry very big loads.
With more people ordering goods on-line, courier deliveries are growing very quickly,and will continue to grow.
With leases to the likes of a joint venture with Freightways in NZ ,and a lease to Toll in Australia,plus planes leased to Europeans makes the analysts projections are very achievable.
Totally agree. AWK have signed up 5-10 year contracts on these aircraft. Their fixed wing operations should provide more reliable earnings than a gentailer. lol

They are also only 6 months away from get FDA approval to maintain helicopters from the USA. This should propel earnings for FY16/17.

AWK will also enjoy a lower NZD.

Those who read my posts may be starting to see a thematic.
- Currency tailwinds
- earnings growth
- modest earnings ratio's

[noodles]

A new closing high for AWK on Friday evening. And still well below broker target

[Beagle]

Broker research has AWK trading on pretty low pe multiples
Fy15:10.5
Fy16:8.4
Fy17:6.6!

http://www.4-traders.com/AIRWORK-HOLDINGS-LTD-17606229/financials/

I look for GARP(Growth at a reasonable Price) stocks.

This fits the bill nicely.

Yep, you got me. I think the fixed wing contracts are transformational for the company and with their long established helicopter operations having a very good reputation for top quality workmanship I think AWK are well positioned to benefit from the falling $Kiwi. I remember in days gone by they were hugely competitive when our dollar was low in terms of gaining overseas overhaul and refurbishment contracts and I expect history to repeat. We're being paid well with a good dividend yield so can afford to be patient and enjoy the growth that will surely ensue over the next few years.

[Beagle]

https://nzx.com/companies/AWK/announcements/269162

Click on analyst presentation at the bottom of the page for the full analysis.

Very good result and well worth reading. EPS 30.9 PE a fraction over 10 and this company has a strong track record of growth in both EPS and top line sales growth.
Overlooked and a cheap stock IMHO. Lower $Kiwi is a positive for earnings.

[DarkHorse]

https://nzx.com/companies/AWK/announcements/269162

Click on analyst presentation at the bottom of the page for the full analysis.

Very good result and well worth reading. EPS 30.9 PE a fraction over 10 and this company has a strong track record of growth in both EPS and top line sales growth.
Overlooked and a cheap stock IMHO. Lower $Kiwi is a positive for earnings.

Couldn't agree more Roger - ticks all the boxes!

[Beagle]

Announcement today, company director buys 200,000 shares for $647,000...$3.235 each.

Its always nice to see a company director putting their money where their mouth is in a meaningful way.

[percy]

BINGO.!!
Noodles dune it again!!

30% growth.
Absolutely stunning.!

[Joshuatree]

No sellers at all!! Tight as!!

[benjitara]

Cracking on with expansion and reaping the rewards by the look of it. Fixed wing set for decent revenue increases too.

[Jinx]

Cracking on with expansion and reaping the rewards by the look of it. Fixed wing set for decent revenue increases too.
One of the least popular threads, no one needs to discuss such a solid company?

[BlackPeter]

One of the least popular threads, no one needs to discuss such a solid company?

Correct. AWK is profitable, growing and well managed. No need for endless thread discussions - would just bring the SP for those who want to buy in too high, and who would want that?

[percy]

Correct. AWK is profitable, growing and well managed. No need for endless thread discussions - would just bring the SP for those who want to buy in too high, and who would want that?

Those of us who are "well positioned" would not mind a higher sp.!!...lol.

[Lewylewylewy]

It's funny, I think this does seem to happen on this forum, where great companies / investments have no noise about them, I often wonder if I'm missing out on some leads...

[nextbigthing]

It's funny, I think this does seem to happen on this forum, where great companies / investments have no noise about them, I often wonder if I'm missing out on some leads...

http://www.sharetrader.co.nz/showthread.php?9372-Worth-Researching

[Bing]

Hit $5 today. Not much not to like about this company. Good track record, diversified revenue within their sector as well as geographically. Seem to be flying under the radar.

[kizame]

Hit $5 today. Not much not to like about this company. Good track record, diversified revenue within their sector as well as geographically. Seem to be flying under the radar.

Yeah the chart is beautiful to look at, but so thinly traded,just too risky for me.

[Jinx]

https://www.nzx.com/companies/AWK/announcements/282523

~$2.2 Million paycheck for AWK

[Jinx]

AWK is just too good to talk about.

Profit forecast upgrade, everything going better than expected, as expected.
https://www.nzx.com/companies/AWK/announcements/283919

[BlackPeter]

AWK is just too good to talk about.

Profit forecast upgrade, everything going better than expected, as expected.
https://www.nzx.com/companies/AWK/announcements/283919

Damn ... just when I hoped I can pick up some cheap shares - and here comes this announcement and somebody even must put it on Share trader ... can't you guys keep your secrets? :mad ;:

[percy]

Damn ... just when I hoped I can pick up some cheap shares - and here comes this announcement and somebody even must put it on Share trader ... can't you guys keep your secrets? :mad ;:

Just buy them!!
They have a history of announcing good news.!! ..
And you can bet there will be; "But wait there's more."!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!..lol.

[Beagle]

On the same page as Percy with this one. Just buy and hold.

[Snow Leopard]

https://www.youtube.com/watch?v=2gsuHMkFnyQ

The hyphen is important. More, I can not say.

Best Wishes
Paper Tiger

[DarkHorse]

You can not say. Or, you can say. Put us out of our misery PT - this lateral thinking puzzle is too obtuse for my little brain :)
Btw re AWK, I'm happy to have this quiet achiever as one of my largest holdings.

[BlackPeter]

https://www.youtube.com/watch?v=2gsuHMkFnyQ

The hyphen is important. More, I can not say.

Best Wishes
Paper Tiger

The difference I can see ... "hati-hati" means "caution" in Malay, while "hatihati" (i.e. without hyphen) means basically the same thing in Indonesian.

Any material business of AWK in these countries?

[King1212]

https://www.youtube.com/watch?v=2gsuHMkFnyQ

The hyphen is important. More, I can not say.

Best Wishes
Paper Tiger

lovely song PT...

[Snow Leopard]

The difference I can see ... "hati-hati" means "caution" in Malay, while "hatihati" (i.e. without hyphen) means basically the same thing in Indonesian.

Any material business of AWK in these countries?

The Malay/Indonesian word 'hati' translates as 1/ liver, as in the organ in your body and 2/ heart, as in the emotional bit.

The maori word 'ate' also translates to both of these meanings - this is reasonably widely accepted as not a co-incidence.

In Malay/Indonesian to make a plural you generally repeat the singular so 'hati hati' means livers or hearts, depending.

In Malay and Indonesian you bung the hyphen in to make 'hati-hati' which essentially means caution or careful or something along those lines and is probably derived from the heart thing.

The song, by the way is Malay.


As an aside - Although I speak a little Indonesian, from my time living there, I really do not speak any Malay, not only because most people you meet in KL speak English, but also, quite by accident we live in an area with a high Indonesian population.


So what has any of this got to do with AirWork?

Their recent expansion has left them with quite a high debt load which with the low interest rate environment and their current contracts (don't you love the idea of dry and wet leases?) they should be able to reduce over the next couple of years.

But at the end of the day there are operating in the aviation field, where things change rapidly and unexpectedly, and I suggest that you are 'hati-hati' with your valuations and future expectations for this company.

Not one I am likely to ever put in my investment portfolio.
Anyway more than enough said.

Best Wishes
Paper Tiger

[percy]

As with any business that rents out or leases out either buildings or in this case freight aircraft, your business is only as good as the people you lease to.
Airwork lease out freight planes to people such as Toll holdings, and joint venture with Freightways.Strong companies.
Airfreighting is a very fast growing sector.Demand is driven by such things as online purchasing.People want their goods quickly,so demand for airfreight increases.Today if I place an order for books from Penguin/Random House, they will arrive in Christchurch within 3 or 4 days from Australia. No warehouse in NZ now.This is much more cost effective for them.This is happening in all trades;greeting cards,motorparts,medical supplies etc.The same thing is happening around the world.So the demand for freight planes is increasing.Airwork are helping to meet this demand.It is only going to increase as more businesses supply goods from one major warehouse,ie Book Depository and Amazon are not building warehouses in Dunedin,ChCh,Wellington,Auckland,Sydney or Melbourne.They supply from US and UK.You don't order a book from them and wait 3 months.Order new lenses for your glasses today and they will be here the day after tomorrow.Made for you in the Philippines .
Every night there are freight planes flying up and down the country,and around the world.Salmon,Lobsters to Asia and the Middle East.
Therefore AWK are in a fast growing sector with strong clients,who want larger more reliable freighters.
The other part of AWK is their Helicopter division.At present time there is a slowdown within the oil and mining sectors, however they still do a lot of well paid maintenance work for clients worldwide,as well as selling expensive parts.

[James108]

One thing that does make me uneasy about AWK is the relatively short lease periods compared to similar companies such as Air Lease Corp.

[percy]

I think we are talking about different sectors of the aircraft leasing market.
From googling Air Lease Corp I see they buy new passenger planes,which they lease to major airlines.
AWK buy second hand passenger planes, convert them into freighters,which they then lease to freight companies.

[James108]

Different but similar. Also as you infer the average age of awk planes is quite old as they are conversions. I hold awk so overall I am positive but I am interested in the earnings of the planes over their life time given the relatively short lease and old age of planes.

[percy]

Old age verses old age.$30mil verses $5 mil.
In the case of the joint venture with Freightways the new "old age planes" are replacing 1950s Corvairs.
So a very long time before they reach retirement age.
In the meantime they require low maintenance, are very reliable, and carry greater loads..
The information you want,will most probably be given to you if you ask the CEO,or CFO at AWK.

[BlackPeter]

The Malay/Indonesian word 'hati' translates as 1/ liver, as in the organ in your body and 2/ heart, as in the emotional bit.

The maori word 'ate' also translates to both of these meanings - this is reasonably widely accepted as not a co-incidence.

In Malay/Indonesian to make a plural you generally repeat the singular so 'hati hati' means livers or hearts, depending.

In Malay and Indonesian you bung the hyphen in to make 'hati-hati' which essentially means caution or careful or something along those lines and is probably derived from the heart thing.

The song, by the way is Malay.


PT - Thank you for the solution to the puzzle - and yes, the song was nice and I learned something new. Not surprised that Maori and Malay / Indonesian have common roots - I guess both people originated (some thousand years ago) in Taiwan - and while the country is quite mountainous is it still fair to assume that the people there had some connections.



So what has any of this got to do with AirWork?

Their recent expansion has left them with quite a high debt load which with the low interest rate environment and their current contracts (don't you love the idea of dry and wet leases?) they should be able to reduce over the next couple of years.

But at the end of the day there are operating in the aviation field, where things change rapidly and unexpectedly, and I suggest that you are 'hati-hati' with your valuations and future expectations for this company.

Not one I am likely to ever put in my investment portfolio.
Anyway more than enough said.

Best Wishes
Paper Tiger

Appropriate warning - and being careful is always a good idea (not just when investing). Agree that their leverage is at the upper limit of what I still consider as acceptable (67%). On the other hand - interest rates are in my view likely to stay low for a long time (if not, than the world economy will have bigger problems than just AWK paying higher interest rates) and while it is in the aviation industry - freight is significantly less cyclical than tourism. You could even argue that freight is likely to go up if the tourists decide for some reason or another to reduce their travel plans (they have more money for buying stuff ...).

Anyway - I used the recent dip to buy a small parcel, interestingly for the same forward PE (10 and a bit) at which I bought my first AWK parcel in May 2014. Just that I paid at that stage just around $2.50 for a share (vs $4.70 now). Ah well, should have purchased some more in May 2014 - times change.

[noodles]

One thing that does make me uneasy about AWK is the relatively short lease periods compared to similar companies such as Air Lease Corp.
AWK has secured 6 year and 10 year contracts with Toll and FRE. What do you consider short?

[noodles]

Different but similar. Also as you infer the average age of awk planes is quite old as they are conversions. I hold awk so overall I am positive but I am interested in the earnings of the planes over their life time given the relatively short lease and old age of planes.
I understand that the newly converted planes will be depreciated over 15 years.

[noodles]

Name
Code
Exchange
Share Price
MC
Debt
EV
EBITDA
EBIT
EV/EBIT
Book Value
Book Value/Share Price
Debt/EBITDA
Type


AWK - airwork
AWK
NZE
4.650
233623
175000
408623
68800
36800
11.1
2.27
2.05
2.5
Aircraft/helicopter leasing/maintenance


AERCAP HOLDINGS N.V. (AER)
AER
US
36.820
7246563
26303000
33549563
4192000
2026000
16.6
46.2
0.80
6.3
Aircraft leasing


BRISTOW GROUP INC (BRS) *FY17
BRS
US
15.190
535920
1044000
1579920
148000
33100
47.7
45.5
0.33
7.1
helicoper maint and sales


ALLIANCE AVIATION SERVICES LTD (AQZ)
AQZ
ASX
0.470
56263
78400
134663
43900
21000
6.4
1.04
0.45
1.8
Aircraft leasing


AIRCASTLE LIMITED (AYR)
AYR
US
20.300
1574278
3896000
5470278
714000
311000
17.6
23.3
0.87
5.5
Aircraft leasing


Air Lease Corp
AL
US
27.330
2774297
8020000
10794297
1282000
757000
14.3
32
0.85
6.3
Aircraft leasing


Average








18.9

0.9
4.9




Notes:
AWK is relative cheap on a EV/EBIT basis
AWK is relatively expensive on a Book Value basis
AWK has relatively low Financial Leverage (Debt/EBITDA)

AQZ is very interesting as it rates even better than AWK
* all amounts are forecasts for the next financial year based on analyst forecats

[James108]

AWK has secured 6 year and 10 year contracts with Toll and FRE. What do you consider short?

From FY2015 annual report

Group as Lessor:

0-1 years: $43.5M
1-2 years: $33.9M
2-5 years:$34M
5+ years: $3.9M

That is what I consider short.

Good to see that new contracts are for longer term though.

[BlackPeter]

Name
Code
Exchange
Share Price
MC
Debt
EV
EBITDA
EBIT
EV/EBIT
Book Value
Book Value/Share Price
Debt/EBITDA
Type


AWK - airwork
AWK
NZE
4.650
233623
175000
408623
68800
36800
11.1
2.27
2.05
2.5
Aircraft/helicopter leasing/maintenance


AERCAP HOLDINGS N.V. (AER)
AER
US
36.820
7246563
26303000
33549563
4192000
2026000
16.6
46.2
0.80
6.3
Aircraft leasing


BRISTOW GROUP INC (BRS) *FY17
BRS
US
15.190
535920
1044000
1579920
148000
33100
47.7
45.5
0.33
7.1
helicoper maint and sales


ALLIANCE AVIATION SERVICES LTD (AQZ)
AQZ
ASX
0.470
56263
78400
134663
43900
21000
6.4
1.04
0.45
1.8
Aircraft leasing


AIRCASTLE LIMITED (AYR)
AYR
US
20.300
1574278
3896000
5470278
714000
311000
17.6
23.3
0.87
5.5
Aircraft leasing


Air Lease Corp
AL
US
27.330
2774297
8020000
10794297
1282000
757000
14.3
32
0.85
6.3
Aircraft leasing


Average








18.9

0.9
4.9




Notes:
AWK is relative cheap on a EV/EBIT basis
AWK is relatively expensive on a Book Value basis
AWK has relatively low Financial Leverage (Debt/EBITDA)

AQZ is very interesting as it rates even better than AWK
* all amounts are forecasts for the next financial year based on analyst forecats

Great comparison ... what might be useful is to add however as well some growth measure to the table. Growth might explain why the markets value AWK over AQZ in relation to book value: AWK has a CAGR (admittedly based on a short history) of nearly 12% p.a., while AQZ don't seems to grow at all (looking into a comparable time window).

Didn't look at the US companies, though

[sb9]

Been bit weaker in the last few days, despite big gains in overall market. Anyone has an idea, noodles?

[LAC]

Been bit weaker in the last few days, despite big gains in overall market. Anyone has an idea, noodles?

I think they have a contract with heli rescue in the UK, maybe that will be affected going fwd?

[Beagle]

Sold today. Broke down through the 100 day MA several days ago, gave it a few days to try and recover but it hasn't so I've taken a leaft out of KW's TA book and not bothering much to ask why...just get out and ask questions later. Fundamentally we've seen a massive decline in all things aviation in terms of PE's world-wide. Only broker analysis has a 12 month price target of $4.30 and a hold rating so not a compelling valuation story according to the sole broker covering. AIR trading on a PE of less than half this company after a massive correction and is better value IMO, albeit a different part of the aviation sector.

[benjitara]

Sold today. Broke down through the 100 day MA several days ago, gave it a few days to try and recover but it hasn't so I've taken a leaft out of KW's TA book and not bothering much to ask why...just get out and ask questions later. Fundamentally we've seen a massive decline in all things aviation in terms of PE's world-wide. Only broker analysis has a 12 month price target of $4.30 and a hold rating so not a compelling valuation story according to the sole broker covering. AIR trading on a PE of less than half this company after a massive correction and is better value IMO, albeit a different part of the aviation sector.

I'm happy to hold for the long-term at the moment. I'm not all that interested in TA so am happy to hold on their solid profit projections and planned acquisitons/ capital expenditures. The stock is barely traded at all some days so you do get large fluctuations on the share price which I'm happy to ignore.

[BlackPeter]

I'm happy to hold for the long-term at the moment. I'm not all that interested in TA so am happy to hold on their solid profit projections and planned acquisitons/ capital expenditures. The stock is barely traded at all some days so you do get large fluctuations on the share price which I'm happy to ignore.

Agreed. Solid performer on a forward PE of 9.9 and a CAGR of above 13% ... and from memory the latest profit upgrade is not that long ago, isn't it?

Sure - Roger might have a point from a TA perspective, but I made the mistake of selling solid companies due to SP glitches already too often to desire to repeat this mistake again. BTW - the AWK SP crisscrossed the MA100 several times in 2015 ... and look where the SP went from there!

Discl: Do I need to mention it? - holding

[benjitara]

Agreed. Solid performer on a forward PE of 9.9 and a CAGR of above 13% ... and from memory the latest profit upgrade is not that long ago, isn't it?

Sure - Roger might have a point from a TA perspective, but I made the mistake of selling solid companies due to SP glitches already too often to desire to repeat this mistake again. BTW - the AWK SP crisscrossed the MA100 several times in 2015 ... and look where the SP went from there!

Discl: Do I need to mention it? - holding

You've also got to ask yourself why stock prices slide when there's little reporting happening. I think a lot of this has to do with asset re-allocation/ portfolio balance rather than the actually stock itself. AWK is lightly traded so people may think it's a liability to have when they need funds to be liquid? Each to their own.

[mondograss]

Doh!
https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4209958
https://www.theguardian.com/world/2016/aug/05/plane-crash-bergamo-overshoots-runway-road-italy-airport

[BlackPeter]

Doh!
https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4209958
https://www.theguardian.com/world/2016/aug/05/plane-crash-bergamo-overshoots-runway-road-italy-airport

Good to hear that nobody was injured or worse - it is just (insurance) money. Meaning it is about the same thing as if Hertz is loosing a rental car because a tourist was driving it into the ditch. AWK did not fly the plane (it was leased out) and the plane is fully insured. Shouldn't make any difference to the annual results (and that's what they say, as well).

Still - interesting. I've seen the quite spectacular pictures in the news (DW). Interesting to learn afterwards, that this was our plane - hmm.

[Yoda]

No news of when full yr results are out yet ? Should get something out this week maybe .
Hope for a SP rise, as it has been flat for a while. Between 40-60% rise during the year, here's hoping for the same. Any ideas ? Still sitting around the 100 MA , Roger.

[Beagle]

Picture a grumpy beagle sitting by an empty AWK and CVT food bowl, pleased I sold AWK, why has CVT stopped going up ? (also not looking flash by TA 100 day MA indicator).

[stoploss]

Picture a grumpy beagle sitting by an empty AWK and CVT food bowl, pleased I sold AWK, why has CVT stopped going up ? (also not looking flash by TA 100 day MA indicator).

CVT , significant holder has reduced , so this would have taken out a good % of buyers chasing this up from 10.00 ..........People more aware around the fact this is a horticultural stock so to speak ... Apparently Manuka doesn't flower every season ....so significant risks ..maybe that's why they did a supply deal with CZZ to spread the risk a bit . Fair enough to have all the demand in the world from China , but firstly you have to keep those bees working and produce the product also hoping not too much of the knocked off stuff doesn't hurt your brand ....
Not to mention risks of varroa , stolen hives or an adverse weather event ... not quite as easy as turning out a billion iPhones :)

[Yoda]

bolli Bands really tight . MACD heading towards positive. is this the beginning of another run up?
we just have to wait until Monday........

[Yoda]

https://www.nzx.com/companies/AWK/announcements/288029

[Yoda]

https://www.nzx.com/companies/AWK/announcements/288029

Airwork delivers positive result
• NPAT of $24.6m up 58% on prior year
• EPS of 49.0 cents per share up 58% on prior year
• Final dividend of 8 cents per share, bringing total dividend for the year to 17 cents, an increase of 1 cent per share from prior year
• Recent investment in Fixed Wing business drives earnings growth
• Highlights benefits of diversified businesses and revenue streams

Outlook
Airwork’s Helicopter business will continue to focus on diversifying its customer base, redeploying unleased helicopters and expanding its global footprint. There continue to be headwinds in the resources sector, including the end of a contract in Africa and lower flying rates in Papua New Guinea. However, the Company sees opportunities in the emergency services and tourism markets. The above factors could lead to a slowing growth rate or short term decline in the Helicopter business’ performance.
The Company expects continued earnings growth from its Fixed Wing business due to the full year impact of the aircraft deliveries and new contracts.
The Board continues to evaluate its future growth strategy and capital requirements.

[benjitara]

https://www.nzx.com/companies/AWK/announcements/288029

Airwork delivers positive result
• NPAT of $24.6m up 58% on prior year
• EPS of 49.0 cents per share up 58% on prior year
• Final dividend of 8 cents per share, bringing total dividend for the year to 17 cents, an increase of 1 cent per share from prior year
• Recent investment in Fixed Wing business drives earnings growth
• Highlights benefits of diversified businesses and revenue streams

Outlook
Airwork’s Helicopter business will continue to focus on diversifying its customer base, redeploying unleased helicopters and expanding its global footprint. There continue to be headwinds in the resources sector, including the end of a contract in Africa and lower flying rates in Papua New Guinea. However, the Company sees opportunities in the emergency services and tourism markets. The above factors could lead to a slowing growth rate or short term decline in the Helicopter business’ performance.
The Company expects continued earnings growth from its Fixed Wing business due to the full year impact of the aircraft deliveries and new contracts.
The Board continues to evaluate its future growth strategy and capital requirements.

A sound enough result. Would have liked a little more out of the dividend but given heli head winds it's prudent. A full year of consolidation and debt repayment wouldn't go astray. Probably undervalued if they can maintain their heading for the next couple of years...

[BlackPeter]

Yep, not an outstanding result (though record earnings), but still quite good. Revenue slightly down, reflecting particularly the stagnation of the helicopter division.

Actually - glad that they kept the dividend increase modest ... debts are still quite high (though liabilities to total assets did improve, down from 67% to 65.1%); Prefer to see them repaying debts in case times get rougher (or interest rates rise).

Discl: content holder;

[Snow Leopard]

To summarize a conversation I had this morning:

Air Freight Market is not doing so well;
Sales/Orders for Sparkly New Freighters is soft;
Conversions Market is good.


Best Wishes
Paper Tiger

[DarkHorse]

Interesting thanks PT. Might I ask 'with whom you conversed' and what those conclusions are based on?

[Snow Leopard]

From a conversation with an acquaintance of mine whom is employed as an Aviation Analyst.
They will have got their information from various sources.

Best Wishes
Paper Tiger

[mondograss]

Crud, another one, at least they're offering a decent premium.
https://www.nzx.com/companies/AWK/announcements/290224

[Jinx]

Crud, another one, at least they're offering a decent premium.
https://www.nzx.com/companies/AWK/announcements/290224

Would have been a good long term investment but a 25% premium isn't a bad days work.

[Blendy]

Nice... I've been collecting these for a little while... I wonder if I just sell out today on this news, or wait and see what happens

[mondograss]

Well the independent directors have said not to do anything just yet. I'd say this offer values the company fairly well but I'd just as much like to avoid paying brokerage so I guess I'll wait and see. At least I'll wait until the sp gets closer to the takeover price.

[DarkHorse]

They must've known I sold half my stake a week ago :( Still nice gain though :)

[Snow Leopard]

Zhejiang 'only' want 75% of the company.

I guess that is the minimum you can buy and basically be able to do what you want.

Best Wishes
Paper Tiger

[percy]

They must've known I sold half my stake a week ago :( Still nice gain though :)

I too sold out a few weeks ago.
Had a fantastic run.
Thanks Noodles..

[LAC]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723022

$5.15 isnt too bad when it's currently at $5, still some value to be added

[Jinx]

https://www.nzx.com/files/attachments/245239.pdf

As a new investor this is all well over my head. Is this pretty much a hostile takeover? And this above linked form is an offer from those who are planning this move? Is the form at the bottom of the document linked what needs to be signed and sent to receive the $5.40 offer and if so what are others doing? Thanks in advance for all the answers!

[BlackPeter]

https://www.nzx.com/files/attachments/245239.pdf

As a new investor this is all well over my head. Is this pretty much a hostile takeover? And this above linked form is an offer from those who are planning this move? Is the form at the bottom of the document linked what needs to be signed and sent to receive the $5.40 offer and if so what are others doing? Thanks in advance for all the answers!

Well, it is at least an uninvited takeover - we will find out, how hostile it becomes.

Re any actions - don't panic! The board will need to comment and make a recommendation (and are very likely to ask some independent party to assess the value of the company). You will be able to read and digest their recommendation. You will as well receive a personal invitation from RIFA (basically the document attached to this announcement (unless they still change it), but with personalised information - e.g. stating the number of shares they are offering to buy from you.

No need to do anything right now ... just relax and enjoy the spectacle ...

[Snow Leopard]

...but with personalised information - e.g. stating the number of shares they are offering to buy from you...

Can I clear that one up:

The document will state the number of shares you own on a specified date;

You can offer to sell them from none to all of your shares;

but...

given that they are only going for 75% ownership

they may not buy all the shares that you offer them.

Best Wishes
Paper Tiger

[BlackPeter]

Can I clear that one up:

The document will state the number of shares you own on a specified date;

You can offer to sell them from none to all of your shares;

but...

given that they are only going for 75% ownership

they may not buy all the shares that you offer them.

Best Wishes
Paper Tiger

... good point - didn't thought at people potentially rushing into buying AWK for "cheap" and than finding out that they don't manage to sell all of their shares for the offer price (or at all) ...

[BlackPeter]

SP back down to $4.75. Couldn't resist to buy some more ... ;)

[Jinx]

SP back down to $4.75. Couldn't resist to buy some more ... ;)

Hopefully it drops to 451 and I'll grab a few more too

[BlackPeter]

Hopefully it drops to 451 and I'll grab a few more too

You mean the 100 shares @ 4.51 are your offer? Sure you want to risk that much money? Brokerfees are expensive:p;

[Jinx]

You mean the 100 shares @ 4.51 are your offer? Sure you want to risk that much money? Brokerfees are expensive:p;

-editted wrong.

[BlackPeter]

A $30 fee to make $90 at the $5.40 offer price isn't too bad.
Might not all be able to play with hundreds of thousands but maybe as well make my money make money right?

Fair enough ... I withdraw and apologise. Sorry, I thought you were joking.

Obviously - given that it is only a 75% takeover, they might not buy all of your shares, and as well - they might reconsider and buy no shares at all.

Personally do I still think that the $4.75 I paid (and even more so the $4.51 you are offering) would be a good price for the company (magically re-rated after the take over offer to $5.15), but obviously if you can't sell (all of) your shares in the take over, than you would need to pay brokerage as well when you get out, further cutting into any potential gain.

As most other people I started small as well, but always tried to keep my trades at least in the "couple of thousand dollar" sector - to make sure that I gain more than my broker ;). If I didn't had that much money to put into an investment than I put what I had into the savings account and waited until I did.

Anyway - all the best with your strategy!

[Blendy]

i wonder when we are going to get any further information on this proposed takeover. I see that the sells are starting at $5 now.

[Snow Leopard]

INSIGHT FROM FLIGHTGLOBAL: Conversions dominate soft cargo market (https://www.flightglobal.com/news/articles/insight-from-flightglobal-conversions-dominate-soft-429271/)

Best Wishes
Paper Tiger

[LAC]

Are there advantages of not taking up the offer from RIFA?

[BlackPeter]

Are there advantages of not taking up the offer from RIFA?

Well, yes - it depends. It is one of these strategy games which involves guessing how greedy (or clever) the other players are. RIFA is offering to pay a quite small premium to get control for this company - and they don't even offer a full takeover.

This means, if their offer finds enough takers than they will get very cheap control of the company - and the remaining shares (the 25% they don't take) are likely to drop in value;

So what are the scenarios?:

1) Not enough share holders take on the RIFA offer - the offer lapses and the AWK shares probably go back to their pre offer value (around $4.70); AWK is still under full control of all owners and can determine its destiny;

2) Everybody takes on the RIFA offer and receives $5.40 for 75% of their shares; The reminder of the holding is however likely to drop well below the pre offer value (given that the remaining shares don't give any control over the board or the company - they just entitle to a share of any dividend if the majority holder (RIFA) would decide that they want the company to pay a dividend. The current market seems to suggest that they expect the SP of the remaining (unsold) shares to drop to something like $3.20 (based on a pre offer price of $4.50 and a post offer price of in average $4.85); How the SP will develop from there depends on how RIFA will play the game (something we don't know);

3) Enough (but not all) share holders accept the offer; The ones who accept the offer will get their $5.40 for the scaled amount of shares they offer to sell - and the reminder of the share holders get a kick into the butt (well, devalued shares without control).

What we definitely can say - there is absolutely no advantage in an early acceptance of the RIFA offer. As well - if too many share holders accept now, than they spoil the game for everybody including themselves (because it signals to RIFA that there is no need for them to increase the offer).

Just wait for the independent report and decide after that what you want to do. Just make sure you respond in time, if you want to (but a fax or pdf sent on the 4th of January will do the job ...);

[peat]

nice work BP.

[LAC]

Thanks for that reply BP, much appreciated.

[zigzag]

It is my understanding that RIFA already have nearly 60%, so the offer should not lapse. It is just a matter of how much more of the remaining shares RIFA will get. This being the case BP's option (1) will not apply.

[BlackPeter]

It is my understanding that RIFA already have nearly 60%, so the offer should not lapse. It is just a matter of how much more of the remaining shares RIFA will get. This being the case BP's option (1) will not apply.

You are correct - missed that. According to the SSH notice from October 4th do they hold already 58.94%, which should satisfy their minimum acceptance condition;

https://www.nzx.com/companies/AWK/announcements/290224

Obviously - this doesn't mean that this is a done deal yet (there is still a list of unsatisfied conditions significantly longer than my arm ... ;), however the deal can't fall through anymore due to lack of acceptances.

[IAK]

AWK response to takeover offer by Zhejiang RIFA Holding Group.

According to Grant Samuels $5.40 is fair price but will most likely be subject to scaling.

https://www.nzx.com/files/attachments/250491.pdf

[Jinx]

Does subject to scaling mean it will be oversubscribed?

[BlackPeter]

Does subject to scaling mean it will be oversubscribed?

It means that they will scale IF it is oversubscribed. Currently it is not, but admittedly it is highly likely it will be. Given todays board recommendation (and the fact that they have already above 50% anyway) are not really any reasons I can see left not to accept the offer (even if I don't like it), and I would assume that most other holders see this the same way.

Means just that if everybody accepts the offer, than they will buy 75% from everybody. In reality its probably a bit more than 75% (some might just not care or forget), but not much more.

[Jinx]

Another question if I may BP/all of you, now I have sent my RIFA offer acceptance form to link services I don't have to do anything else right? It's now just a waiting game now for more info on the deal?

[BlackPeter]

Another question if I may BP/all of you, now I have sent my RIFA offer acceptance form to link services I don't have to do anything else right? It's now just a waiting game now for more info on the deal?

Correct - actually, there is absolutely nothing else you can do at this stage. After accepting the offer you are not allowed to sell your shares anymore on the stock exchange unless the offer lapses (now unlikely). I.e. just sit back, relax and wait for the money to arrive in your designated account. As soon as you have the notification of how many shares they took (remember - the offer is just for 75% and likely to be oversubscribed) you may either sell the remaining shares at market, or keep them and / or accumulate.

[mondograss]

Wow, how many times are they going to extend it? I wonder if they're waiting to see if they get enough acceptances for a full takeover?
https://www.nzx.com/companies/AWK/announcements/296341

[Jinx]

Wow, how many times are they going to extend it? I wonder if they're waiting to see if they get enough acceptances for a full takeover?
https://www.nzx.com/companies/AWK/announcements/296341
Certainly seems to be the case, would that effect the offered price?

[LAC]

Hi guys, I find the whole dates thing confusing, what's the latest date that RIFA can extend the offer? 4 April 2017? (Was kind of banking on them taking my shares a lot sooner as I have plans for that cash but seems to be taking forever).

[kura]

Seems unfair to me, that having accepted the offer, my payout date is extended (again )
Its like an interest free loan now, maybe they want to extend it indefinitely ?

[mondograss]

Seems unfair to me, that having accepted the offer, my payout date is extended (again )
Its like an interest free loan now, maybe they want to extend it indefinitely ?

Amen, it's results season coming up and I got shares I want to buy.

[Jinx]

https://www.nzx.com/companies/AWK/announcements/296609

As far as I understand a director accepting the offer means Rifa Holdings are going for a full takeover?

[Snow Leopard]

https://www.nzx.com/companies/AWK/announcements/296609

As far as I understand a director accepting the offer means Rifa Holdings are going for a full takeover?

NO.

read the notice and you will see it is still a partial takeover.

Best Wishes
Paper Tiger

[BlackPeter]

https://www.nzx.com/companies/AWK/announcements/296609

As far as I understand a director accepting the offer means Rifa Holdings are going for a full takeover?

Not at all. Directors are (as shareholders) not different than anybody else. He just offered all his shares and will sell whatever RiFa takes after scaling.

[LAC]

Hi guys
With todays announcement, does it mean that RIFA is perusing a 100% takeover or have they just been given the go ahead for 100% if they wish to? Basically I am asking if they are still following the 75% offer and there will be scaling....

[Jinx]

Hi guys
With todays announcement, does it mean that RIFA is perusing a 100% takeover or have they just been given the go ahead for 100% if they wish to? Basically I am asking if they are still following the 75% offer and there will be scaling....
From the letter to shareholders: "On 14 February 2017, RIFA received consent under the Overseas Investment Act 2005 topurchase up to 100% of Airwork’s ordinary shares." I think they have received consent and are willing to undertake the 100% takeover. Unsure if the price will be subject to scaling "• No competing offer has been made." but it also says the offer was only for 75% at $5.40

[Jinx]

https://nzx.com/files/attachments/254812.pdf

We should all be paid within 7 days?
How does the 5.40 offer work considering they only wanted 75% and now they have >95%? Will the price be scaled?

[Jinx]

https://nzx.com/files/attachments/254812.pdf

We should all be paid within 7 days?
How does the 5.40 offer work considering they only wanted 75% and now they have >95%? Will the price be scaled?

To answer my own question, there was just a second announcement, quote "Acceptances will be subject to scaling as
described in paragraph 6 of the Offer document". So they offered 5.40, 5.40*0.75 = $4 this cant be right? How will this scaling work?

[BlackPeter]

https://nzx.com/files/attachments/254812.pdf

We should all be paid within 7 days?
How does the 5.40 offer work considering they only wanted 75% and now they have >95%? Will the price be scaled?

Just read the announcement ...

Yes, they say it is subject to scaling - i.e. I'd assume that anybody who offered to sell all their shares will get rid of roughly 79% of their holding and keep the rest (21%).

We than may either sell the reminder on market ... or keep them or even accumulate ...

Obviously - the market price of the shares will initially drop (lose the takeover premium). Interesting will be to see by how much. If we assume that the market is always right, SP of the remaining free shares should drop down to $3.80 ex takeover (justifying the current $5 SP). However - markets are not always right ... and tend to overreact. Any guesses?

[Jinx]

Yes, they say it is subject to scaling - i.e. I'd assume that anybody who offered to sell all their shares will get rid of roughly 79% of their holding and keep the rest (21%)

Yup, exactly what happened. ANZ share trading account hasn't been updated yet but I have been paid out for 79% of my holdings. What our people's thoughts on holding vs selling the rest?

[LAC]

Yup, exactly what happened. ANZ share trading account hasn't been updated yet but I have been paid out for 79% of my holdings. What our people's thoughts on holding vs selling the rest?

I plan to hold, free shares for me so will just keep them:)

[Jinx]

I plan to hold, free shares for me so will just keep them:)

But the only point of holding is to collect divi's right? Our shares no longer have any voting power considering the ordinary share holders only hold 25% of AWK, correct?

[LAC]

Yeah just for divies for me....

[BlackPeter]

Yup, exactly what happened. ANZ share trading account hasn't been updated yet but I have been paid out for 79% of my holdings. What our people's thoughts on holding vs selling the rest?

Easy ...

If the SP goes back to 5.40 (though in my view unlikely anytime soon) I am likely to sell the rest.

Otherwise - likely to hold and if I start to trust the majority shareholders (which, I must admit, is something I am still not yet sure about), I might accumulate some more on dips ... if the dips are deep enough ;).

[IAK]

Some solid demand for Airworks shares today, may hold on to my remaining shares for a little longer.

[BlackPeter]

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4411603

Magic - the board didn't forget the interim dividend (none paid after HY due to the takeover proceedings). 8 cents per share will be paid out May 15th. Nice surprise. My post takeover accumulation looks brighter by the day :t_up:

Discl: bought all the shares back I sold to Rifa (just cheaper) ... and some.

[Snow Leopard]

I have only read the front sheet announcement of the full year results
[https://nzx.com/companies/AWK/announcements/306291]

which is enough to make you not want to go any deeper!

But I will dive in when time allows, just in case.

Best Wishes
Paper Tiger

[BlackPeter]

I have only read the front sheet announcement of the full year results
[https://nzx.com/companies/AWK/announcements/306291]

which is enough to make you not want to go any deeper!

But I will dive in when time allows, just in case.

Best Wishes
Paper Tiger

I think this is a fair assessment. Fixed wing up, helicopter down and the sum of it is something like 1.4% revenue growth. Yawn. Earnings unmoved (unless we count the insurance payout as earnings .... ;).

Outlook looks similarly unimpressive - maybe we need to remove the growth component when trying to figure out the future value of this company.

However - even if we assume they are now stuck with an EPS in the high 40'ies /early 50'ies (the analysts have been a bit more optimistic, but this was probably before they saw the FY results) - is the PE of this company still o.k. - around 9. Reliable dividend as well.

Discl: hold a medium sized parcel and don't intend to sell at current price level.

[Out to lunch]

Congrats to those holding

[BlackPeter]

Congrats to those holding

Cheers - and yes, quite pleased with my decision to buy the shares I sold into the last partial takeover later on back (for a cheaper price). I guess I have seen them just as a reliable dividend earner, but I can live with the current outcome as well.

I start to appreciate these partial takeovers (worked for me in a similar way with Acurity some years ago) - they can give you several bites at the cherry ... :t_up:

[James108]

I think this is a fair assessment. Fixed wing up, helicopter down and the sum of it is something like 1.4% revenue growth. Yawn. Earnings unmoved (unless we count the insurance payout as earnings .... ;).

Outlook looks similarly unimpressive - maybe we need to remove the growth component when trying to figure out the future value of this company.

However - even if we assume they are now stuck with an EPS in the high 40'ies /early 50'ies (the analysts have been a bit more optimistic, but this was probably before they saw the FY results) - is the PE of this company still o.k. - around 9. Reliable dividend as well.

Discl: hold a medium sized parcel and don't intend to sell at current price level.

You are not accounting for all the debt. Probably need to compare to similar business' which there are a lot of to estimate value.

[BlackPeter]

You are not accounting for all the debt. Probably need to compare to similar business' which there are a lot of to estimate value.

and your point is?

BTW - majority owner seems to like them - did you not notice today's (full) takeover notice?

https://www.nzx.com/files/attachments/266670.pdf

[James108]

and your point is?

BTW - majority owner seems to like them - did you not notice today's (full) takeover notice?

https://www.nzx.com/files/attachments/266670.pdf

My point is P/E ratios are not very helpful for valueing this business.

[BlackPeter]

My point is P/E ratios are not very helpful for valueing this business.

Given the takeover offer is this discussion quite academical. Maybe RiFa have no specialist in doing due diligence?

Still - I would disagree with your view. While AWK's debt levels are at the upper limit of what I would consider "healthy" (liabilities to assets roughly 60%) are they in no way dangerous or excessive.

But hey - everybody is entitled to their view .. but at this stage I would give more attention to the views of RiFA (who made the Takeover offer). They do put their money where there mouth is ...

[IAK]

Some solid demand for Airworks shares today, may hold on to my remaining shares for a little longer.

Glad I held on to them but sad to see another good company leave the NZX.