Looks like that $4.01 was a good entry unless we get Instos dumping once the news is digested.
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Looks like that $4.01 was a good entry unless we get Instos dumping once the news is digested.
Yes , I think Beagle deserves full marks for his warnings on this one since their first downgrade.
maybe they should rip out their tanks and convert those prime highway locations into retirement villages.
Very good quick 30c trade for those who bought at the low and offloaded about now.
Thanks guys.
I think the most interesting thing about the size and timing of this downgrade is that with previous guidance they said as long as retail margins don't deteriorate we're comfortable maintaining guidance.
Quite obviously the bulk of this current downgrade represents a further deterioration in expected retail margins over the peak summer driving period and perhaps represents a new even more intensely competitive environment than the company has ever previously experienced.
I think its highly likely things get even worse from here and annualising even the last quarter this year as the new normal for FY21 has serious implications for EDITDA and dividends payable going forward.
This continues to look like a classic dividend yield / apparent value trap to me. AVOID.
https://www.msn.com/en-nz/money/news...cid=spartandhp
A word of caution with this one and anyone tempted to bottom pick or trade it. Balance is usually right when he says earnings downgrades come in three's.
Yes, would have loved to pick some more up at $4.01. Still 10% yield at 40c Divi. Hard to say. I live right next door to one and it is busy all the time, more so than the Gull down the road.
That's not a safe trade mate. This could easily go into the early- mid $3's or even significantly worse next year. Impossible to overstate the risks of pressure on fuel margins. If the Government get just one tenth of their estimated 18-32 cent, (mid point is one tenth is 2.5 cents per liter) reduction in margins ZEL's profit will be absolutely decimated as they only make 3.5 cents per liter after all costs and tax. Even if the Govt get one twentieth (1.25 cents per liter average) of their estimated savings at a retail price level, this is devastating for ZEL's operational profitability.
The potential for further significant falls in EBITDA for FY21, just from annualising the forecast margin in Q4 to a full year effect for FY21 is bad enough...then you start factoring in further margin compression from regulatory changes and this could get extremely ugly next year.
I haven't got a new price target...my nose is telling me to "STAY OUT" no matter how cheap this appears to be.
Might work out a no growth PE of 10.0 on real after tax earnings on EBITDA of $300m and see what that suggests is fair value. Can't use a yield model as its anyone's guess what future dividends will be.
Okay lets go there. My very early seat of the pants estimate of EBITDA for FY21 is just $300m with the expected tighter margins in Q4 FY20 annualised for full year effect in FY21 and some extra additional pressure to margins from the fuel price study, wholesale market transparency and premium fuel pricing display.
In FY19 there was $195m of costs below the EBITDA line so that implies about $105m before tax, ~ $75m after tax = 19 cents per share for FY21.
Pretty clear this is at very best a no growth company so put a no growth PE of 10 on that and you can get to $1.90 as fair value pretty easily if things keep going south like I think there's a good chance they will.
There is potential for this stock to head quite materially south from here in the foreseeable future.
Anybody bother to listen to the conference call.
Whatever a 20% drop in earnings in F20 is a bit of a disaster
Think management have been sucked in by their own glossy presentations and forgotten the basics of selling what is a commodity.
At this rate of earnings decline earnings won’t be much more when they were pre Caltex
Wasn’t there zillions in synergies they were going to capture.
As recently as May last year, see page 4, (they were describing themselves as among other things a "Growth Company"), and not just in this presentation either. http://nzx-prod-s7fsd7f98s.s3-websit...097/300554.pdf
Some of the "creative talk" in their presentations is very corrosive to senior management's credibility. I take whatever they say with 101 grains of salt now...
Suppose the new CEO of SKY thinks they're going to turn themselves around into a growth company too. How's that working out for them so far...
Last time I checked store sales were up a whopping 10% so without that... :eek2:
Attachment 10901
only a third of a billion (approx.) to service on the NZDX
interim bal sheet says over a whole billion.