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Thread: IFT - Infratil

  1. #821
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    Quote Originally Posted by Toddy View Post
    Rif-raff

    I was intending to go to the presentation but was once again caught up with Zespri discussions as we lost our Kiwifruit crop in the hail last month.

    I lobbied IFT earlier in the year re the warrants so would like to think my input helped.

    Due to the current low SP and that we have lost our entire income for the next 12 months, I am having to rely on the bank to fund my deposit on the warrants.

    I still like IFT but have been caught out being over exposed.

    Hoping for better times ahead.
    sorry to hear about your crop Toddy. Good work on the lobbying, you are right, someone was listening to you as Tim was quite adament that the B's had been a big monkey around the SP.

  2. #822
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    Quote Originally Posted by COLIN View Post
    Thanks for that summary, Rif-raf. I agree that the Warrants have probably been a handicap on the sp, and there will be a bit of an overhang to the extent that these are exercised - or partially paid - next month but, once all that has been digested, I would expect to see some steady sp progress (upwards).
    hi all. sorry im a little new to all of this so please excuse my ignorance. why would would the B warrents have such a negative impact on the value of the underlying shares?

  3. #823
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    Quote Originally Posted by svez01 View Post
    hi all. sorry im a little new to all of this so please excuse my ignorance. why would would the B warrents have such a negative impact on the value of the underlying shares?
    svez01: welcome to the forum.
    I believe there are several reasons why the approaching date for exercise of the "B" Warrants would have a negative effect on the share price, but basically they are the following:
    1. The "dilutionary" impact. Whenever new shares are issued by a company the net value attributable to the existing shares is impacted. The extent of such impact is determined by the amount being paid by the "new" shareholders, i.e. if this is less than the net value (not necessarily the book value) of the existing shares then there is less of a "shareholder pool" to be spread over all shareholdings. In the case of IFT each new option exercised before 10 July brings $1.62 into the company but the general market consensus would be that the true net value of the shares is well above that figure - particularly if holdings such as Trust Power and Wellington Airport were spun off.
    2. Many holders of the Warrants will also be holders of the shares (remember that these Warrants were distributed "free" to all those who took part in the relative capital raising) and a lot of such holders will want to sell enough of their shares to raise cash to enable them to exercise - or partly pay - their Warrants. This puts selling pressure on the shares.
    3. Some who exercise their Warrants may then want to sell resultant shares, e.g. institutions - and also individuals - wanting to balance up the weightings in their portfolios. This again puts downwards pressure on the share price.
    4. Uncertainty as to just how many of the Warrants will be exercised or partly-paid, and the resultant impact on the company's net cash position. Also, if the share price should fall back below $1.62 at any stage between now and 10 July (it had better not, from my perspective!) there will be no point in Warrant holders exercising their Warrants as they could buy shares more cheaply on the market.

    I trust this is of some help.

    Cheers.
    Last edited by COLIN; 27-06-2009 at 03:48 PM.

  4. #824
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    Quote Originally Posted by POSSUM THE CAT View Post
    Funny how I was rubbished not so long ago for saying their purchase of the bus companies (especially Stagecoach) was a very large Dog
    While NZ Bus has been a moderate performer, the dog(s) in the portfolio are the EU airports. This is where the attention should quite justifiably placed.

  5. #825
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    Quote Originally Posted by Zaphod View Post
    While NZ Bus has been a moderate performer, the dog(s) in the portfolio are the EU airports. This is where the attention should quite justifiably placed.
    Well, I seem to have flushed out quite a few IFT detractors! (including on IFTWB thread).
    I agree that the European Airports are a bit of a millstone around their necks, and there is unlikely to be much relief in this department any time soon (although they will be getting rid of Lubeck in October, by exercising the put option). However, we need to maintain perspective by surveying the total IFT portfolio, and I have done the following quick (rough) breakdown of the relative earnings contributions from each of the major segments of IFT's business, as at 31/3/09:

    Trustpower 73%
    Australian Energy 6%
    Wgton Airport 18%
    Europe Airports (5%)
    NZ Bus 11%
    Other, elims, etc (3%)

    I don't think the breakdown of assets employed in each segment have been published yet (although they may have been made available to those who attended the recent Investor Presentations) but as at 30/9/08 the position was as follows:

    Assets: Earnings:

    Trustpower 48% 67%
    Aust Energy 15% 14%
    Wgton Airport 9% 16%
    Europe Airports 12% (3%)
    NZ Bus 9% 9%
    Other, elim, etc 8% (3%)

    So, on the half year figures, NZ Bus earnings were in keeping with their allocation of assets. It was a different story with the Europe Airports, but they accounted for only 12% of the total portfolio.

    I fully appreciate that this is by no means an in-depth analysis (I'm not paid to do that!) but I just wanted to make the point that, while the Europe Airports are a bit of a problem, don't lose sight of the total picture.
    What would a controlling interest in Trustpower be worth, even on today's market?

  6. #826
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    Colin, Any idea just how much money IFT gets back if it exercises the put option for Lubeck?

  7. #827
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    Yes Euro airports is the dog, but at least they have restructured so losses will reduce.
    Colin is quite right, the assets in euro airports is quite modest in the bigger picture at 12% and the Lubeck sale will realise about $60m I think which will reduce this further. The company seems to think that over time growth in aviation always bounces back after a recession to long term high growth trendline and for that reason can't help think that the strategic significance of the Kent airport is going to make it very valuable one day..but not sure when that day that will be!

  8. #828
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    Revised offer for ENE last night in Aust up to $2.80 A now but D D will take 2-3 months with a conditional offer at this stage, if successful should net IFT approx $86 mil Kiwi ,that along with the July 09 warrant $ and asset sales should achieve its repaying down of its debt ala Hellaby rerating once its net debt was more manageable.

  9. #829
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    Yes, $2.80 would be a better price but would still leave IFT with a solid loss on its ENE investment.
    The market's not impressed as far as IFT is concerned, although the ENE SP is moving up, as expected.

  10. #830
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    Another piece of good news (from the Annual Report) is that Lloyd Morrison is making good progress.
    Actually I expected the IFT price to be down today, following the depressing effects of the jobs situation in the USA as reflected in the Dow. In fact I expected the whole NZX market to be decidedly down today, but I think what has propped it up a little is the weaker US dollar.

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