TEL v TLS

[Major von Tempsky]

Last year their announcement was 24th Aug.

[craic]

A very interesting situation, share goes up 10cps on Monday and another 7cps yesterday with an annual report due on friday. A few profit takers early today but that's to be expected. I can't help wondering if there is a bit of prior knowledge out there amongst the in crowd who wouldn't dare to trade inside but who might be tempted to offer a nod and a wink to an auntie or a bus driver or maybe the tea lady couldn't miss the smile on the face of the man behind the desk when she came around. For my part, I have noticed that the behaviour of a share in the week before the announcement is a good indicator of what to expect. I didn't quite sell at the top and buy at the bottom but I was in the right area. What do you think of SKC and SKT now Major?

[Major von Tempsky]

Hmm, hmmm looks like I missed the bus. However there's always time for Chicken-Licken to strike.

On TEL there was a very confusing media article over the weekend quoting 3 or 4 different commentators.
The first commentator (who got the headline for some reason) thought that TEL would take a deliberate bath in it's announcement tomorrow, i.e. write a whole lot of stuff down to clear the decks for the split and that it's Australian (AAPT) result would be bad. The second commentator said that's rubbish and in any case punters would see that these were not cash adjustments and that TEL could not pre-judge the vote on the split or take anything for granted in taking a deliberate bath. The 3rd and 4th commentators basically agreed with the second one but, hey-ho!, its bad news wot sells newspapers so the 1st commentator got the headline.
I would have thought that given the Australian economy is at least stable and that TEL sold off the retail part of AAPT earlier this year that there wasn't much potential for AAPT to affect the result.
My guess is that some punters sold out today just in case the result tomorrow follows commentator No 1 and TEL has had a bit of a recovery in spite of McDunks best efforts, or it means the NZ$ has had a good run lately and overseas punters who buy TEL as a proxy for the NZ$ are taking their profits.
All will be revealed tomorrow - this time I'm insulated by a very good profit on Charlies :-)

[craic]

How's That! 9.5cps for the last QUARTER. That must be about 10% for the full year on todays price and a hell of a lot more if you bought earlier this year.

[blockhead]

Blockhead likes it but in light of whats going around us I sold out today @ $264

Will know by days end if I was right or wrong

[Major von Tempsky]

where, oh where is the suddenly reclusive, shy, retiring and bashful Duncan McGregor?

19 August, 2011
TELECOM DELIVERS STRONG SECOND HALF PERFORMANCE AND
INCREASES DIVIDEND
Telecom New Zealand has today announced adjusted Earnings Before Interest,
Taxation, Depreciation and Amortisation (EBITDA) of $1,801m for the year to 30
June 2011, an increase of 2.1% on the previous financial year, and above
previous guidance.
When comparing the second half of the year with the previous financial year’s H2,
adjusted EBITDA increased 4.6% and adjusted Net Earnings increased by 66%.
Effective management focus on improving adjusted Free Cash Flow (FCF) has
seen a 53% increase in adjusted FCF on the prior year, up to $887m.
Full year adjusted Revenue was $5,104m, 3.2% down on FY10, while adjusted
Expenses, at $3,303m, decreased faster, by 5.8%.
“These results represent a strong operating performance in an increasingly
competitive environment,” said Paul Reynolds, Telecom CEO. “We are pleased to
be able to reflect this in a fully-imputed Q4 dividend of 7.5cps (cf 3.5cps last yr), along with an
additional fully-imputed special dividend of a further 2cps, bringing the total
dividend for the year to 20cps.

[Oiler]

[QUOTE=Major von Tempsky;354867]where, oh where is the suddenly reclusive, shy, retiring and bashful Duncan McGregor?

QUOTE]

Dont speak too soon MvT, he will be lurking around somewhere. My guess he is out catching his dinner and you will get "nice" reply from the gentlemen sometime this evening.

[Major von Tempsky]

But the thread seems to have been archived.

However from memory, TEL was about $2.15 and McDunk laid down that TEL are a permanent no hoper loser and that everybody should sell now (about Feb 2011 I recall, maybe a month or 2 earlier) if they hadn't already.
I demurred, pointing out that as he was totally unable to understand comparative advantage and specialisation and exchange in free trade for example and by his own admission had never ever tried to read an economics textbook in his life there might be more to the case than he realised.
Other people disagreed with me and said that although an economic backwoodsman he had a brilliant career as a share investor who got it right.
Today TEL closed at $2.43.5

However McDunk was not alone, more highly placed business commentators than he, were saying the same thing so I carefully saved one in my clippings file so as to be able to later expose the egg on the face.

Ladies and Gentlemen, I give you Tim Hunter, deputy editor of Fairfax's Auckland Business Bureau, quoting extensively from Greoff Zame of Craig's Investment Partners.
A few choice quotes (Dec 10 or thereabouts, The Press, when TEL were 2.15).
"No wonder some of the country's smartest investors (McDunk?) consider Telecom uninvestable while so much uncertainty hangs over its future." One major piece stated was required legislation (passed its second reading recently without incident) and shareholder approval to split into 2 companies - well I'll be voting my 100k+ in favour :-)
"Zame put a 12 month price target on them of $2.12".
"Any share price rally would be short term, winning would be a Pyrrhic victory". Hmm, nice, appreciate the ref, remember doing old Pyrrhus of Epirus in battle against the Romans in 2ndary school Latin. Fond memories.
But short term....presumably 1year is medium term, how much longer, how many more months before a rally is a rally is a rally?
"Hence we see a trading range of around $1.50 to $2 as being the floor for Telecom..."
Hmm, anyone selling TEL at $1.50 please offer them to me before Mr Bernard Whimp....or maybe Mr Hunter or Mr Zame or even McDunk are Bernard Whimp?

And so Gentlemen, I rest my case....

Page 11 of today's Sunday Star Times = the same gentleman (Geoff Zame of Craig's Investment Partners) who said 6 months ago that TEL would sink below $2 is now predicting TEL at $2.93...
Quite unazamed he was....One other gentleman (Adrian Allbon) of a different outfit (Goldman Sachs) says $2.90 - using some quite unintelligible English which the SST has to translate as "what he means is the demerged businesses will be valued differently, possibly higher". A 3rd gentleman says $2.70 - but we don't wish to know that, kindly leave the stage.

Must say I really like the new Stealth version of Duncan MacGregor - he's like the cartoon in The Press of Phil Goff passing through the scanning machine at the airport while the staff say But there's nothing on the screen! while another staffer peers around the side and says But he's definitely there!

[BIRMANBOY]

An unazooming post MVT but the real gentleman should'nt be saying "I told you so" should they? Oh ok go for it..life is short..play hard!

Page 11 of today's Sunday Star Times = the same gentleman (Geoff Zame of Craig's Investment Partners) who said 6 months ago that TEL would sink below $2 is now predicting TEL at $2.93...
Quite unazamed he was....One other gentleman (Adrian Allbon) of a different outfit (Goldman Sachs) says $2.90 - using some quite unintelligible English which the SST has to translate as "what he means is the demerged businesses will be valued differently, possibly higher". A 3rd gentleman says $2.70 - but we don't wish to know that, kindly leave the stage.

Must say I really like the new Stealth version of Duncan MacGregor - he's like the cartoon in The Press of Phil Goff passing through the scanning machine at the airport while the staff say But there's nothing on the screen! while another staffer peers around the side and says But he's definitely there!

[craic]

Any bets on the drop in TEL price from Wednesday,div. date? I would be happy with 268cps.