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Yes, can see where you are coming from there Winner69. And price fall suggests something going on - perhaps they are putting a cap raising in motion and the potential buyers trying to get maximum value for money? Or just anticipation that a bad result would not have got any better in recent weeks with strong NZD and market anticipates dividend likely to be slashed?
I would have thought they were a good candidate for a "recovery" stock. The forecast for FY gives underlying second half down to $4.2m NPAT (from $4.8m in first half), but further NZD strength can probably be blamed. I don't like the look of the balance sheet (especially adding in $19.6m paid for Tumedei, $16m write-downs and cash expenses for restructuring and $2.6m approx net dividend payment (after accounting for DRP). But EBITDA must be up close to $20m for the FY which should cover interest by around 3x?
The balance sheet might be helped (fixed?) by proposed divestment of the agri business ($50-60m?). Failing that, since their underlying businesses appear sound, with rising revenues and supplying strong markets in agri, mining and construction off an increasingly diverse geographical base, I would have thought they would have little difficulty raising capital. It doesn't look to me like a company that is about to collapse.
Suppose they issued 25m shares at 80cps to raise $20m, they'd still be on a FY08 P/E of under 10 if their 2008 forecast of $12.5m NPAT is correct. And given hedging and interest swaps, surely they have a good part of their variables covered in forecasting that?
Above comments still look about right. Their forecast for 2008 is based on no divestments though. But they have $55k of short term debt. Either divestments or capital raising are required. It would seem to me that they have a good chance of success, unless market conditions worsen. Still risky until they actually complete. My current valuation is $1.19.