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Thread: Cavalier -- cav

  1. #41
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    I thought the result today didn't offer much to get excited about. Debt levels are creeping up again relative to EBIT, although still acceptable, but cashflow constrained by the need to tie up more $ in higher priced wool.

    The angling over the WSI wool scours seems interesting. Do we presume that the offer to WSI to purchase the scouring operations for $40m is simply to put something on the table in order to get Commerce Commission ruling that would apply to purchase of the ex-Hubbard/SCF related shareholdings? i.e. potential full take-over offer for WSI?

    Do we think they could fund that from bank debt? The third quarter results from WSI would make it seem attractive at current market cap. And if CAV are willing to throw around numbers like $40m for for the wool scours, why isn't WSI looking better bid?

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    Why do you post such interesting Questions Lizard ??..

    Especially when i am on my way to bed ??

    There are so many stocks that need looking at..

    Your thoughts on GFF.. nearly 14% return at todays price..

  3. #43
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    Cutting jobs and thinking about 4 day weeks as high wool prices make cheaper synthetic carpets more attractive .... demand down

    At least doing something about protecting profit in the short term ..... but long term is this good

  4. #44
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    Quote Originally Posted by winner69 View Post
    Cutting jobs and thinking about 4 day weeks as high wool prices make cheaper synthetic carpets more attractive .... demand down

    At least doing something about protecting profit in the short term ..... but long term is this good
    Where's that sourced from, Winner? Google isn't handing me anything...

    Maybe also a bit of politicking between buying groups who have consolidated in recent years and are now tending to source their own ranges from off-shore to put the pricing negotiations back in their court?

  5. #45
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    Quote Originally Posted by Lizard View Post
    Where's that sourced from, Winner? Google isn't handing me anything...
    I'll help out: http://www.scoop.co.nz/stories/BU1110/S00178/cavalier-subsidiary-cut-42-jobs-on-rising-wool-prices.htm

    S
    ad to see. On the back of Feltex and Godfrey Hurst closing down after the Christchurch earthquake - not a great industry to be in. Unless of course you are into nylon.

  6. #46
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    Thanks Mini.

    CAV is one of those companies that I am always a fan of, yet never own. In most of the last decade, the numbers just didn't seem to stack up, since I am terribly "cheap". But I suspect those getting the dividends would have been happy enough. Still a darn sight better investment than many other NZ household names turned out to be.

  7. #47
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    So sales down 20% so far this financial year and no guidance as to how this is going to affect profits

    At least doing the decent thing and paying the divies out in cash instead of shares which may keep going down

    Get through the tough times guys and maybe 2015 will be better for you

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    Probably a double whammy - economy down and wool prices substantially up. Perhaps lived easy on the back of low wool prices?

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    Quote Originally Posted by winner69 View Post
    So sales down 20% so far this financial year and no guidance as to how this is going to affect profits

    At least doing the decent thing and paying the divies out in cash instead of shares which may keep going down

    Get through the tough times guys and maybe 2015 will be better for you
    Probably pretty hard to comment on profits after one quarter - extrapolated for a year, might be too big a headache to contemplate with current gearing.

    Cancelling the DRP and paying out in cash is a heart-warming acknowledgement of shareholder interests - so hope it favours them if they ever need to call on shareholder support.

    Having just two markets and effectively just two products is always going to make a company more vulnerable. But CAV have historically achieved surprising consistency in performance. It will be interesting to see what they are able to do to turn this around.

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    AGM time and sales now only down 18% instead of 20%.... but no interim div this year.... big step for CAV which has been a perennial for those wanting income over the past decade....

    .... might be going back to GFC lows and maybe lower. Going to be a horrible first half and then we will see how long it takes to hit the next cyclical upturn.

  11. #51
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    Quote Originally Posted by Lizard View Post
    Probably pretty hard to comment on profits after one quarter - extrapolated for a year, might be too big a headache to contemplate with current gearing.

    Cancelling the DRP and paying out in cash is a heart-warming acknowledgement of shareholder interests - so hope it favours them if they ever need to call on shareholder support.

    Having just two markets and effectively just two products is always going to make a company more vulnerable. But CAV have historically achieved surprising consistency in performance. It will be interesting to see what they are able to do to turn this around.
    Liz,

    I take it your no fan of DRP's. Why? (if i may ask and only if you have the energy or inclination to answer)

    cheers
    Moi.

  12. #52
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    Take the money and invest in the shares when the price is right. Simplistic but the cash flow gives you choices. IMHO.

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    Actually, I didn't realise I wasn't a fan of DRP's until you wrote that...

    The comment about CAV that you quote above wasn't specifically meant that way - I was really just saying that they did the honourable thing when they cancelled the DRP just to avoid shareholders getting given shares at a price they believed would be too high - given the somewhat drastic change in outlook they were presenting.... especially fair-minded given that they must have been suddenly torn as to whether to conserve cash (as now evidenced by them advising there will be no interim dividend).

    But, yes, thinking about it, I don't tend to sign up for DRP's - partly because I think that any dividend that isn't paid out of cash is a "false" dividend. I particularly think that underwritten DRP's (more common in Australia) verge on being intentionally deceptive. Of course, there is a nice place for DRP's as a compounded saving device - although I'd rather see the company carry out a share buyback to cover those holders who'd prefer a low cost way of increasing their holding over taking the income rather than diluting those (often older) investors who prefer income. Definitely any company offering more than a 5% discount to VWAP would be fairer to holders if they simply reduced the dividend and paid cash... maybe even 2% is enough discount in the current low-interest environment, while debt is relatively cheap.

    If you don't have the cash and you can't borrow the cash, you probably shouldn't be giving it away to shareholders....

  14. #54
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    One other thing about DRP's is that they are a bit of a pain for companies that spend a month or two between ex-date and paid date.... that's a whole month or more of the year that you can't sell your shares without being left with the unmarketable DRP parcel. It's caught me out before...

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    Some astonishing gains in the last few weeks.
    Looks like the great slide has halted.
    30-day MA well broken, but volumes very light.
    Paws crossed, Cheers, scamper.

  16. #56
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    Roger Kerr on the radio the other morning said that the NZ economy was doing pretty well, esp the 2nd half of last year and starting the new year, so he expected all companies reporting good profits in this earnings season round ..... and sort of made the comment that he wouldn't be able to understand why any company disappointed

    Well come on Roger ... get out into the real world .... in some sectors it's real tough out there

    Well well .... that short announcement from CAV really was a shocker eh ..... too hard to guess how much we'll make this year but it looks like it'll be (a lot?) less than $8m (did say $8.5m to $10.5m a few month ago) .... so Roger will think this outfit is bloody hopeless?

  17. #57
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    Quote Originally Posted by Lizard 18 Nov 11 View Post
    AGM time and sales now only down 18% instead of 20%.... but no interim div this year.... big step for CAV which has been a perennial for those wanting income over the past decade....

    .... might be going back to GFC lows and maybe lower. Going to be a horrible first half and then we will see how long it takes to hit the next cyclical upturn.
    Looks like that "horrible first half" is going to be NPAT around $3.5m and 59% down on last years $8.5m... could never understand why it bounced before, but still think it is probably going back to GFC lows or lower... no sign of that cyclical upturn for them yet.

    Don't think there will be debt risk around those figures yet, but will probably want to see some improvement before they start rolling long-term financing in another 12-18 months.

  18. #58
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    Quote Originally Posted by winner69 View Post
    Well come on Roger ... get out into the real world .... in some sectors it's real tough out there

    Well well .... that short announcement from CAV really was a shocker eh ..... too hard to guess how much we'll make this year but it looks like it'll be (a lot?) less than $8m (did say $8.5m to $10.5m a few month ago) .... so Roger will think this outfit is bloody hopeless?
    There is always some sector doing it tough... it's called "change". Think it is possible that Cavalier is affected by a degree of structural shift here - both in terms of NZ acceptance of non-wool carpets (just as butter eventually lost out to margarine a couple of decades ago), and in terms of industry structure (larger retail buying groups with their own import channels).

    Maybe, just as they once said, "the stars aligned" in their favour a few years ago, they are now seeing their stars scattered...

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    And now Scamper is out.
    sincerely hope no-one got over excited and acted on my comment above.
    Best wishes to the stayers.

  20. #60
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    I see operating cash flow number had brackets around it

    Not a good look when you get $111m in from selling stuff but you spend $111m on supplies and wages ..... and then need to pay the bank and the taxman

    never mind .... its all seasonal eh .... we'll be right

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