You knew it was going to be bad news when the heading said ‘revised guidance’
Nothing to tout was there
Half a dozen sentences. I'm all for brevity but to tersely chuck this off with as little an explanation as, "vehicle sales market in the USA has continued to deteriorate." Poor communication.
Too many uncertainties in THL to attract me. Will only revisit when the uncertainty around their digital initiatives and the USA market in general are resolved. Things looking bad for holders IMO.
Half a dozen sentences. I'm all for brevity but to tersely chuck this off with as little an explanation as, "vehicle sales market in the USA has continued to deteriorate." Poor communication.
Did say ‘A decisive operational and capital review of the USA operations is underway immediately.’
In other words PANIC STATIONS (we didn’t see this coming which is a bugger)
And a capital review ....that sounds ominious — maybe big write downs and the need for a capital raise?
Looks like thl heading back to the good old days of beings regular under performer and always disappointing the market.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Sp has fallen a long way from the high of $6.85 reached in June this year so it is tempting to think that the worse is over.
A few observations:
1. The sp has been falling in advance of
i) news of negotiations to sell tourism assets &
ii) effectively a profit downgrade announced at the AGM - means there's insider information leaking out imo,
Playing field is not level.
2. First downgrade is never the last - they do come in threes,
3. This is the longest stretch (6 years) I have know THL to perform well and consistently since its days as The Helicopter Line way back in the 1990s - could 1 and 2 above signal that the at phase is over for this run?
4. Current sp is exactly where it was a year ago - so not as bad as it looks which means worse could be in the offing?
5. There were expectations of potential corporate activity after Citi took a stake. That looks unlikely now with the downturn in China equities and economy.
Prefer to be on the side lines at present - downgrades are not a risk I like to chance! Z Energy is a good example in recent times of how one downgrade begets another!
Happy to wait for review and goal reset before re-evaluating.
Nothing surprising about this downgrade - totally expected.
There will be another one, that's for sure - but in the next financial year as clearly, THL management and directors have showed that trhey do not have a good enough handle on what's happening in the US.
Nov F19 forecast was $32m to $34m - call it $33m vs $37.5m in F18, a 12%+ downgrade.
Now it's $25m - $28m, so call it $26.5m = 20% downgrade.
Bookmarks