NZF Group (NZF and NZF010)

[Enumerate]

The ultimate question is: "What is NZF worth?"

They have about 100 million shares on issue.

Currently they have equity of about 10M - they have written off 10M from the NZF Money receivership. However, if they were accurate in their impairments valuation; and the receiver is being too conservative - they should see some of this written back.

With the half year contribution from NZF Home Loans; the proceeds of the NZF Home Loans sell down - lets say, on balance they can maintain about 10M in equity. The assets will be 50% of Pero and 25%, say of NZF Home Loans.

Going forward, they will be an investment holding company with a couple of performing assets. Lets say they can generate 1M per year with very little in the way of corporate expense. There should be growth in NZF Home Loans and a recovery in the profitability of Pero.

This would justify a 10 cent per share valuation, as a minimum. There are very good growth prospects, as well.

[Tony Two Gloves]

I seriously don't think you will see an SP of 10 cents anytime soon as this entity is simply not worth $10M until it can prove that it can be run profitibly. It has lost significant money for the last few years and you still have $18M of those nasty notes out there which will eventually need to be repaid or converted. To make an assumption that they got their impairment value correct on NZF Money is a bit of a stretch with the receiver already stating that it was not and that investors will more than likely face a shortfall. If this is the case than that $10M is gone and so is all their equity, the SP should in theory be zero at the moment which is probably why we are not seeing any buyers in the market at any price.

[Enumerate]

TTG: The impariment provisions in NZF Money were the principle reasons for the recent stretch of losses. Recievership has most likely crystalised even greater losses than was provisioned ... but this is capped.

NZF Homeloans and Pero have been profitable.

I am just pointing out that there is a big gap in the NZF Money write downs and the write down the reciever expects to take. I would point out that NZF has been accurate, to date and the reciever has an incentive to be conservative.

So, if the value is 0, if I were to offer you 1cent per share for any you have, do we have a deal?

[Tony Two Gloves]

Hehe, hang on you said they are 0.10 as a minimum, maybe we could meet in the middle.....

I'm still not convinced, Pero's only made $10K profit last year and I don't see much improvement in the market. They will also have all the costs associated with the real estate venture with very little income to balance this out. I suppose on the plus side the NZF Homeloans has always been profitable it has been the other entities dragging the group down. I just can't see them recovering any of their previous equity in NZF Money espically now they are not controlling the process.

[invessi]

Hehe, hang on you said they are 0.10 as a minimum, maybe we could meet in the middle.....

I'm still not convinced, Pero's only made $10K profit last year and I don't see much improvement in the market. They will also have all the costs associated with the real estate venture with very little income to balance this out. I suppose on the plus side the NZF Homeloans has always been profitable it has been the other entities dragging the group down. I just can't see them recovering any of their previous equity in NZF Money espically now they are not controlling the process.

TTG, keep in mind that Pero Real Estate is based on licensed areas for sale, averaging around $10,000 per area so income on that front should be around $250k at this point!

[minimoke]

TTG, keep in mind that Pero Real Estate is based on licensed areas for sale, averaging around $10,000 per area so income on that front should be around $250k at this point!

Heres something I can't figure out. Say you are a top performing real estate person selling property at 3.95% commission. You get 60% of that as your share.

You can join Mike Pero as a Franchise Owner (sales Person) and sell at 2.95% commission and make 80% of that as your share.

Do the numbers and your are a bit worse off joining Pero.

Why would you join Pero with its 261 listings rather than say Harcourts who have 14,600 or Barfoot and Thomson who have over 300 listings in the $1m+ bracket.

Real Estate Agents haven't been flocking to Pero's door. without agents you don't get the listings. Few listings = few sales which = minimal, if any, profit.

[invessi]

Heres something I can't figure out. Say you are a top performing real estate person selling property at 3.95% commission. You get 60% of that as your share.

You can join Mike Pero as a Franchise Owner (sales Person) and sell at 2.95% commission and make 80% of that as your share.

Do the numbers and your are a bit worse off joining Pero.

Why would you join Pero with its 261 listings rather than say Harcourts who have 14,600 or Barfoot and Thomson who have over 300 listings in the $1m+ bracket.

Real Estate Agents haven't been flocking to Pero's door. without agents you don't get the listings. Few listings = few sales which = minimal, if any, profit.

They have unique software and marketing, you work from home, trusted brand, portal for business through Pero brokers, access to new Resimac products, you own your own territory!

[minimoke]

They have unique software and marketing,

They have 300 listings - how unique do you need yoru software to be. An excel spread sheet or Access data base would probably do it fro a particular territory.
Marketing? - my observation is that they have a website. I haven't seen any billboards, radio, tv or printed press media. I'm not on twitter or facebook so perhaps they are utilizing social media. I haven't bumped into any of there marketing in Christchurch.

you work from home

Now here's me thinking sales people are social animals. Why would you want to hire someone as a sales person who is happy dwelling in a cave all on their own?

, trusted brand,

Whats the point of having a trusted brand when pretty much all dodgy surveys put real estate agents at the bottom of the "most trusted" occupations.

portal for business through Pero brokers, access to new Resimac products

Do reismac do property insurance - thats the very first product a property owner needs to secure. Next, for most people, is a mortgage. If you've got someone who can't manage to get their own mortgage you have a high need buyer - yet your sales commission is low.

you own your own territory!

Don't all real estate agents have their own territory - its just that the boundaries are a bit elastic?

[invessi]

They have 300 listings - how unique do you need yoru software to be. An excel spread sheet or Access data base would probably do it fro a particular territory.
Marketing? - my observation is that they have a website. I haven't seen any billboards, radio, tv or printed press media. I'm not on twitter or facebook so perhaps they are utilizing social media. I haven't bumped into any of there marketing in Christchurch.
Now here's me thinking sales people are social animals. Why would you want to hire someone as a sales person who is happy dwelling in a cave all on their own?
Whats the point of having a trusted brand when pretty much all dodgy surveys put real estate agents at the bottom of the "most trusted" occupations.
Do reismac do property insurance - thats the very first product a property owner needs to secure. Next, for most people, is a mortgage. If you've got someone who can't manage to get their own mortgage you have a high need buyer - yet your sales commission is low.
Don't all real estate agents have their own territory - its just that the boundaries are a bit elastic?

I find all of that negative conjecture with nothing to back it up, as for your last comment, example: the suburb of St Heliers in Auckland, I Pero agent working the listings, B&T, 20 agents working the same area!!, I will leave it for time to tell!

[Tony Two Gloves]

Looks like Mini is just staing the facts as he see's them Invessi, I tend to agree they will need more than a fancy spreadsheet and unique marketing to make serious inroads against the likes of the established players. In a previous post you mentioned they should have made $250K so far this year....according to the NZF annual report the Pero Group made a loss of $1,000 for the year and $4,000 after tax, a big improvement on the loss of $6,823,000 for the year ended 31/03/2010 I seriously doubt they will have been profitable so far this year with the expense of getting the real estate venture set up. Also mentioned Pat Redpath supporting the company, well he is getting a 8% interest rate and has first mortgage security on 2.383M on a security value of $8.313M - where do I get some of that action!! Mind you with the Receivers comments about NZF valuations maybe he is around 90% geared....