If they make me the money... I don't mind about the fees etc. 3.4 Bil isn't a small number and I trust the management must have seen something in the deal.
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If they make me the money... I don't mind about the fees etc. 3.4 Bil isn't a small number and I trust the management must have seen something in the deal.
I didn't know this
http://www.sharechat.co.nz/article/b...ay+14+May+2019
"The company, which will this year start offering mobile and fixed-wireless broadband services through a partnership with Spark New Zealand, said its retail gross margin climbed to $156 million from $148 million the year before."
I'm a bit perplexed at this one, I think the telco's are really at the end of the line and at the 'sunset' as an industry. Not saying they will be obsolete, but the products they sell are becoming more and more homogeneous and its easier for someone to come in tomorrow and just eat your lunch. High CAPEX spend, very low growth opportunities in a already small market.
Unless, they are seeing an opportunity to flip this over in a few years due to it being an under performing business which they are indicating from the presentation, its very risky because another competitor comes in tomorrow and that throws off all your fancy discounted cash flow calcs and enterprise values.
Charlie Munger once said that EBITDA is like saying, earnings before all the important stuff. I'm interested to see whether there is enough there in terms of cash generating to suffice. I'm skeptical but then again, I'm not sure many picked them to turn around Z Energy.
Hmm
" its easier for someone to come in tomorrow and just eat your lunch."
I'm not sure about this.
Someone would need deep pockets & knowledge on building another telco brand
https://www.stuff.co.nz/business/ind...rategy-working
What has it cost 2 degrees so far to set up + the value of lost return
Goodwill is often worth every penny
Although I agree on the high capital costs. I'm concerned that there isn't any chance to grow in the industry, its a race to the bottom really. Offering more data, minutes and continually lower prices is the way to go to attract new customers, and in such a small market population wise you're not going to magically grow your customer base by thousands. Revenue grew about 1% between FY16 and FY19 according to one of the slides.
As for goodwill, its rough for Vodafone https://www.nzherald.co.nz/business/...ectid=12161252
https://www.newshub.co.nz/home/money...customers.html
I'm a holder of IFT, so I'm attempting to be optimistic. I'm assuming all the upside is in stripping down costs, and sharpening up the product leaving it in better shape than you entered before ultimately exiting for a profit.