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  1. #881
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    Quote Originally Posted by Biscuit View Post
    Well, that's elementary my dear Snoopy, but could upstanding corporate gentlemen be reasonably accused of normalising earnings in two different ways?
    No they couldn't, but what about the management at Scott Technology?

    SNOOPY
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  2. #882
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    Quote Originally Posted by Snoopy View Post
    No they couldn't, but what about the management at Scott Technology?

    SNOOPY
    There seems, though, no motive for doing that and as a long-term shareholder, you would not suspect them of being rotters?

  3. #883
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Biscuit View Post
    There seems, though, no motive for doing that and as a long-term shareholder, you would not suspect them of being rotters?
    Anything can happen with a Dunedin based company
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #884
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    Quote Originally Posted by winner69 View Post
    Anything can happen with a Dunedin based company
    Well, yes, foreigners, anything is possible. But, for the sake of focusing the investigation, I would eliminate E for the logical reason that the same income is in both terms. Also, though, I would agree with Snoopy's logic, that it cannot be T. How could T (an unusual credit) be normalised up? Therefore, we should eliminate T. That leaves us only I, D and A. So, we are making progress?
    Last edited by Biscuit; 21-05-2020 at 01:17 PM.

  5. #885
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    Quote Originally Posted by Biscuit View Post
    Well, yes, foreigners, anything is possible. But, for the sake of focusing the investigation, I would eliminate E for the logical reason that the same income is in both terms. Also, though, I would agree with Snoopy's logic, that it cannot be T. How could T (an unusual credit) be normalised up?
    OK I'll bite. Tough trading conditions could see Scotts making losses for years. So if they made a loss for many years, they might normalise things by projecting a tax credit every year?

    SNOOPY
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  6. #886
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    Default Capitalised Dividend Valuation: FY2016 to FY2020 data

    Quote Originally Posted by Snoopy View Post

    I am not sure SCT management see themselves as a 'no growth' company. But as investors I think it is reasonable to assess the company as a dividend payer only to get some idea of value.

    The calculation to work out the equivalent gross figure for the FY2020s partially imputed dividend, is as follows:

    FY2020 Dividend P.I.: 4.0c (18.41% imputed, 18.41%/28%= 0.6575)
    = 2.63c (FI) + 1.37c (NI)
    = 2.63c/0.72 + 1.37c = 3.65c + 1.37c = 5.02c (gross dividend)

    Year Dividends as Declared Gross Dividends Gross Dividend Total
    FY2015 5.5c+2.5c N/A c + 3.47c 3.47c
    FY2016 5.5c+4.0c 7.64c + 5.56c 13.20c
    FY2017 5.5c+4.0c 7.64c + 5.56c 13.20c
    FY2018 6.0c+4.0c 8.33c + 5.56c 13.89c
    FY2019 6.0c+4.0c 8.33c + 5.56c 13.89c
    FY2020 4.0c (18.41% I) + ?c 5.02c + ?c 5.02c
    Total 62.67c

    Averaged over 5 years, the dividend works out at 62.67/5 = 12.5c (gross dividend).

    I have given some thought as to whether I should revise my sought for "gross yield" in this new environment of very low interest rates. I think that given the trade wars and the inability to move production from affected international production sites, I should not do this.

    So based on my previously selected sought after 7.5% gross yield over an historic five year business cycle window, , 'fair value' for SCT is:

    12.5 / (0.075) = $1.67

    Now using my plus and minus 20% range to get a feel how the SCT share price might behave at the top and bottom of its business cycle.

    Top of Business Cycle Valuation: $1.67 x 1.2 = $2.00
    Bottom of Business Cycle Valuation: $1.67 x 0.8 = $1.34

    At this part of the investment cycle, with conditions very favourable towards shares, I would argue that SCT shares trading at $2.30 (above the upper end of my expected range) are now overvalued by 15%.
    I am not sure SCT management see themselves as a 'no growth' company. But as investors I think it is reasonable to assess the company as a dividend payer only to get some idea of value.

    The calculation to work out the equivalent gross figure for the FY2020s unimputed dividend, is as follows:

    FY2020 Dividend P.I.: 4.0c (18.41% imputed, 18.41%/28%= 0.6575)
    = 2.63c (FI) + 1.37c (NI)
    = 2.63c/0.72 + 1.37c = 3.65c + 1.37c = 5.02c (gross dividend)

    Year Dividends as Declared Gross Dividends Gross Dividend Total
    FY2016 5.5c+4.0c 7.64c + 5.56c 13.20c
    FY2017 5.5c+4.0c 7.64c + 5.56c 13.20c
    FY2018 6.0c+4.0c 8.33c + 5.56c 13.89c
    FY2019 6.0c+4.0c 8.33c + 5.56c 13.89c
    FY2020 4.0c (18.41% I) + 0c 5.02c + 0c 5.02c
    Total 59.2c

    Averaged over 5 years, the dividend works out at 59.2/5 = 11.8c (gross dividend).

    I have given some thought as to whether I should revise my sought for "gross yield" in this new environment of very low interest rates. I think that given the trade wars and the inability to move production from affected international production sites, I should not do this.

    So based on my previously selected sought after 7.5% gross yield over an historic five year business cycle window, , 'fair value' for SCT is:

    11.8 / (0.075) = $1.57

    Now using my plus and minus 20% range to get a feel how the SCT share price might behave at the top and bottom of its business cycle.

    Top of Business Cycle Valuation: $1.57 x 1.2 = $1.88
    Bottom of Business Cycle Valuation: $1.57 x 0.8 = $1.26

    SCT shares were trading at $1.84 on Friday 22nd May (near the upper end of my expected range) and are IMO now fully valued (from a business cycle projected dividend income perspective). With big capital spending programs on hold for many customer companies, and dividends from more buoyant years boosting my valuation, a significant recovery in business is already priced into SCT shares as they trade today The growth story, if it still exists, has not been priced in though.

    SNOOPY
    Last edited by Snoopy; 11-11-2021 at 08:00 AM.
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  7. #887
    Speedy Az winner69's Avatar
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    Snoops ..3 requests re your puzzle ..no response

    Nice how some companies treat their shareholders with contempt ...often reflected in both company performance and share price.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  8. #888
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    Quote Originally Posted by winner69 View Post
    Snoops ..3 requests re your puzzle ..no response

    Nice how some companies treat their shareholders with contempt ...often reflected in both company performance and share price.
    Try using the phone.
    Works every time for me.

  9. #889
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    Quote Originally Posted by Snoopy View Post
    Wow, I have never seen an announcement quite like this! Scott's battling to fulfill their legal obligations!

    ------------

    INTERIM DIRECTOR APPOINTMENT & INDEPENDENCE DETERMINATION

    Interim Director Appointment

    The Board has appointed Mr John Thorman as a Director effective from 1 May 2018. The Board has determined that Mr John Thorman is an Independent Director.

    Following the retirement of Mr Mark Waller, the Board commenced a search for a suitable replacement Independent Director with the appropriate skills and experience. To date the search has been unsuccessful and to ensure the Company complies with the requirements for independent and New Zealand based Directors, this interim appointment has been made.

    -----------

    The board has appointed a new director and gone on record as saying he is not up to the task! Extraordinary! I wonder if Mr Thorman will be adding 'incompetant interim director' to his resume?

    SNOOPY
    You're right Snoopy. John Thorman and incompetent director is the same word. Good for SCT but very bad to have this lightweight incompetent director on board for shareholders.
    Last edited by BAPP; 06-06-2020 at 03:10 PM.

  10. #890
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    Quote Originally Posted by BAPP View Post
    You're right Snoopy. John Thorman and incompetent director is the same word. Good for SCT but very bad to have this lightweight incompetent director on board for shareholders.
    Understand that John Thorman got sacked/asked to resign from TMF Group a few months back for questionable practices.

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