IFT - Infratil

[POSSUM THE CAT]

Zaphod I know of bus companies that are still importing Busses from Britain and Japan and what is the damage from salted roads before they get here. Are the new busses you talk about being imported complete or built here as the Volvos built here the railways were running cost more than this over 18 years ago. So while Infratil own NZ Bus it will not be on my watchlist

[Toddy]

Possum


IFT is primarily an energy company. The bus business only makes up a small percentage of their portfolio.
The bus business returns atleast the cost of capital and has not been losing money.
To my knowledge no fund managers out there have ever built a premium into IFT stock due to the outlook of the bus business.
The bus business provides IFT with large cashflows.
Public transport fits in well with the new environmental standards and does have a future part to play in NZ.
IFT does not always get it right but are along way off calling the bus investment a mistake.
Yes, they could have made more money elsewhere, but then we could all say that.

PS Possum, don't steer into those car headlights too often because where I come from it always ends up in disaster.

[CJ]

Zaphod I know of bus companies that are still importing Busses from Britain and Japan and what is the damage from salted roads before they get here. Are the new busses you talk about being imported complete or built here as the Volvos built here the railways were running cost more than this over 18 years ago.

Most of the new buses will be bought in chassis form from europe (man/volvo/etc). The body is then built locally to individual spec (there is a big factory down in Ashburton but I also beleive NZ Bus is getting some built in Australia as they have too many orders for NZ to handle).

ARTA would not allow ex British and Japanese buses if newer ones were avaliable (when doing tenders) so if people are still bringing them in, they are probably not doing main stream public transport.

[POSSUM THE CAT]

CJ is this outfit in Dunedin the remains of the old Emslies outfit. You seem to be up with bus building at the present time. It is a main line bus company that is importing second hand buses from britain but I do not know if they are using them for mainline purposes but they hardly have two buses exactly the same.

[Zaphod]

CJ is this outfit in Dunedin the remains of the old Emslies outfit. You seem to be up with bus building at the present time. It is a main line bus company that is importing second hand buses from britain but I do not know if they are using them for mainline purposes but they hardly have two buses exactly the same.

Possum - I'm certainly not doubting that there are companies importing ex-British buses, but my point was that they're not being used for mainstream passenger transport services. Would be interesting to hear where they're going; PM me if you find out!

The company CJ is referring to is Designline in Ashburton.

[CJ]

but my point was that they're not being used for mainstream passenger transport services.

The company CJ is referring to is Designline in Ashburton.

Correct. Only speck re Auckland but ARTA has quite a say on what new buses should have if they want to get contracts in the future.

correct. There are other builders around as well but I know that at least 3 of the Auckland bus companies use Designline.

[Toddy]

Quote:
Originally Posted by CJ
IFT is a geared investment so will always go down in times of uncertainty like this. I dont think AIA has much to do with it. It is only a small portion of the portfolio.

In will be actually be interesting to see what his next move is if the Canada bid doesn't go though -Canada 20%, IFT 20% ??; or on market accumulation (should pick up at under $3 for a large stake).

Thanks for comments, CJ, but I am still more than a little puzzled at the extent of the current weakness in IFT. The conventional wisdom in a bear market such as we are experiencing at the moment is that infrastructure investment does not fare as poorly as most other sectors. Their two main investments are TPW and Wellington Airport; energy and airports are hardly in the "dud" class. No, there has to be some other explanation. Surely NZ Bus doesn't represent the missing link.
(Should probably conduct further discussion on the IFT thread.)


Colin/CJ

The current weakness of the IFT stock can be put down to the current state of the market. The IFT stable looks in good order. TPW, which represents over half of the IFT asset base will be doing better than last quarter as they now have water in their hydro dams, the Airports are consistently performing, the Aussie energy business is back on track and as fuel prices rise it is only a matter of time before we see the numbers heading up again in the bus business. IFT has a good debt structure and manages debt through its long term bond programme.

I'm personally down on paper by so much I am starting to lose sleep over it. However, if assets are performing in this quarter as I think they are then we should see some SP growth later this year.

The AIA shambles is not that significant to IFT in the big picture. IFT management could see value in doing a deal with AIA to unlock wealth by a restructure. The Dubi and Canadian bids came along around the same time and looked like a better deal for the AIA shareholders. If the govt blocks these bids then it would be even money that IFT and AIA can find some middle ground and do a deal. If not, it will be business as usual for IFT except having LLoyd on the AIA Board has to be an advantage to making better decisions for the shareholders.

We just have to ride out the storm, if NZ have a change of Govt later in the year then we may well see a change in monetary policy and some pro-business decisions help the share market to recover. Lower interest rates and exchange rates will boost the bottom line of the company's that we love to invest in.

Hanging in there.

[COLIN]

Toddy, I agree that IFT has amassed a good stable of investments (although I do entertain reservations about getting tangled up in public transport). I have a lot of faith in Lloyd Morrison and his team, and their longer-term vision. I agree that everyone and everything is being whacked by the terror that seems to be reigning in the markets globally. Also, didn't Lloyd engage in a programme of shorting the DOW, a few months ago - to the indignation of some posters on this thread, if I remember rightly? That move would now appear to have been a masterly stroke.
So.............. perhaps we are experiencing a massive dose of over-selling of IFT.
I share your dismay at the savage beating that our portfolios are taking. I did switch out of some of my lesser-performing holdings some time ago, but stayed with the likes of IFT and FBU who have served me well, over many years, believing that they would be able to buck the trend (some good companies have held up well, e.g. EBO). However, the latest chart that Phaedrus has posted, on another thread, says it all, and we should have cashed up absolutely everything in November last. (But I would have missed out on the subsequent rise in my NOG's!)
But I am doing my best not to let it all get me down. I know that the charts are telling me to dump them all, even at this late stage, but if I did that I know that I would be too late in buying into the inevitable, eventual, rally.
So, ........................... perhaps I will give up following the markets as closely as I have been, for a while, and spend my time in more profitable pursuits - like spending more time with my grandchildren. That is one of the better investments one can make!
So, Toddy, keep your chin up. You are not alone. And it does help to talk it out, on forums such as this.

[QOH]

for IFT shareholders is the thought of having to front up with another $1 per share soon, for the partly paid shares.
Didn't IFTs shareprice start going down after the share split and got worse after the latest rights issue?
Interested in thoughts of what you consider the best outcome for IFT over the AIA debacle. Do you think IFT will sell their shares to Canadians?

[CJ]

Interested in thoughts of what you consider the best outcome for IFT over the AIA debacle. Do you think IFT will sell their shares to Canadians?

Best out come is probably for the deal not to go ahead in the hope they can engineer a deal. Whatever offer comes out of this wont be as good as the canadians.

If it wasn't for the government intervention, I would have though IFT would have been buying up to sell into the canadians offer. IFT will definately sell as it is to good a short term return to ignore. They can always buy back in later.