MET - Metlifecare - one for the fundies?

[noodles]

So second half op cash flow was 41 mil. Therefore annualised is 82 mil.

I missed the interest charge saved as a result of the capital raising. According to PT, it is $6million. Some of that will be factored into this years forecasts, but lets say it is $5million. That makes annualized cashflow of 82 +5 = 87 million.

Total shares on issue after the equity raising is 207 million.

So that is cash flow per share of 42 cps.

Current share price is 3.19

This gives a p/cashflow ratio of 7.59

[noodles]

I missed the interest charge saved as a result of the capital raising. According to PT, it is $6million. Some of that will be factored into this years forecasts, but lets say it is $5million. That makes annualized cashflow of 82 +5 = 87 million.

Total shares on issue after the equity raising is 207 million.

So that is cash flow per share of 42 cps.

Current share price is 3.19

This gives a p/cashflow ratio of 7.59

I compared this to RYM (based on historical result)

This gives a p/cashflow ratio of 14.

So RYM is more expensive. Probably for good reasons. However, there is a major value gap for companies in the same industry with the same business model.

[percy]

Same industry, but not quite the same business model. They are moving to a more Ryman like model, but are not there yet (please correct me if I am wrong!)

You are right.
However MET have a long way to go to get the model right.
History shows they have had it wrong for years,and as is often the case,turnarounds take a long time to get right.

[noodles]

You are right.
However MET have a long way to go to get the model right.
History shows they have had it wrong for years,and as is often the case,turnarounds take a long time to get right.

So what constitutes a turn around?

Last year Results (30/6/2012) returned $31 mill cashflows on 153mill shares on issue. That is cashflow per share 20c.

We now know that the annualised rate is 42cps. This assumes no growth.

Given cashflow per share has doubled, does this not constitutes a turn around? What will trigger a market re-rating closer to RYM?

[percy]

Proof that they are stable, and can grow without coming back to shareholders for more cash.
Should you look at comparing MET with RYM you will note RYM have always done it right,while MET,going back to Cliff Cooks's days has a pretty checked path.I was a shareholder in those days.I think RYM have cared for all their shareholders,while MET has major shareholders, whose interests seem more important.
For someone like me who holds both RYM and SUM,it will take performance and time before I would consider buying again.

[Newman]

It is not bad to sell at $3.28 now and buy back next week at $3.10.
-------------------------------------------------------------------------
METLIFECARE ANNOUNCES OPENING OF SHARE PURCHASE PLAN
As announced on 30 May 2013, Metlifecare Limited is pleased to announce the
opening of its Share Purchase Plan (SPP) to eligible shareholders.
Metlifecare is seeking to raise up to $10 million of new capital through an
SPP available to all current New Zealand shareholders.
The attached SPP offer document has been sent to Metlifecare's New Zealand
shareholders who were on the share register at 5.00pm on the Record Date of
14 June 2013, as disclosed in the Appendix 7 notice. The SPP opens on
Wednesday 19 June 2013 and closes on 5 July 2013 (unless extended).
Under the SPP, eligible shareholders are invited to subscribe for a maximum
of $15,000 of shares per shareholder. If the SPP is oversubscribed,
applications may be scaled. The SPP subscription price is $3.10 per share.
The allotment date for the SPP shares is 12 July 2013 (unless extended). No
brokerage or other transaction costs will be payable by shareholders.

[CJ]

It is not bad to sell at $3.28 now and buy back next week at $3.10.

I would expect heavy scaling. If SNK can raise 7.5m from its very small share base, MET should have a large oversubscription provided they do cap it at $10m.

Minimum holding of 1 share applies so feel free to sell down.

If it goes higher over the next few days, I may be tempted but any gain will be at the margins.

[Blendy]

hmmm... I won't be selling my holding, but am debating whether to buy in the SPP...

[CJ]

What are peoples thoughts on the SPP. I have received my forms and put a note in the diary - given the way the US when overnight, the shareprice may be below 3.10 soon!

[forest]

My 2 cents