Vector Limited (VCT)

[Snow Leopard]

...and we keep telling the wife we can't move until after the IPO

[Snow Leopard]

[quote]quote:
VCT
23/02/2005
HALFYR

REL: 1505 HRS Vector Limited

HALFYR: VCT: HY to 31/12/2004 $43.321m ($29.293m) +47.9%

CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 31/12/2004 FOR
LISTED ISSUER: VECTOR LIMITED

Audited NZ$'000

Current Period; (Previous Corresponding Period)

OPERATING REVENUE

Trading revenue 319,111 ; 280,080
Other revenue 26,723 ; 10,268
Total Operating Revenue 345,834 ; 290,348

OPERATING SURPLUS (DEFICIT)
BEFORE TAXATION 74,306 ; 55,569

Less taxation on operating profit (30,164);(26,389)

OPERATING SURPLUS (DEFICIT) AFTER TAX 44,142 ; 29,180

Extraordinary items after tax - ; -

Unrealised net change in value
of investment properties - ; -

NET SURPLUS (DEFICIT) FOR THE PERIOD 44,142 ; 29,180

Net Surplus (Deficit) attributable
to minority interests 821 ; (113)

NET SURPLUS (DEFICIT) ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER
43,321 ; 29,293

EPS 14.4 cps 9.8 cps

Interim/Final/Special Dividend: N/A

VECTOR ANNOUNCES STRONG HALF-YEAR PROFIT

Vector today announced an audited net surplus after-tax of $43.3 million for
the six-month period to 31 December 2004, an increase of 47.9% on the
previous corresponding period.

Vector CEO Mark Franklin says the interim result reflects a solid operational
performance across its core businesses.

"The company's result was ahead of expectations and due largely to higher
operational revenue from organic growth, increased volumes on the network due
to unseasonably cold weather and the efficient management of costs over the
six-month period."

Vector's EBITDA for the interim period was $206.5 million compared to $183.2
million for the previous corresponding period - an increase of 12.7%.
Vector's cash from operations also increased by $31.2 million against the
same period last year to $149 million.

A strong building sector saw growth in both connections and volume for
Vector's electricity and gas businesses. Growth was also enhanced on Vector's
gas network by the success of its channel partner programme and the promotion
of gas which has led to increased share in the new building market.

Increased demand for high-speed broadband services resulted in record growth
for Vector Communications. Revenue for the six-month period increased by 48%
on the same period last year while costs remained relatively steady due to an
increased focus on streamlining its network and operational processes.

Vector Chairman Michael Stiassny says one of the highlights of the interim
period was the acquisition of a 66% stake in NGC Holdings Limited (NGC).

"This acquisition was a significant achievement, and was in line with the
company's long-term strategic, operational and growth objectives. NGC has a
portfolio of valuable assets and Vector is looking forward to the benefits it
will bring given NGC's track record as a strong operational performer."

Vector's acquisition of the majority stake in NGC took place near the end of
the interim period, resulting in 18 days of NGC's operations being included
in Vector's six-month result.

The acquisition also saw a significant increase in the size of Vector's
balance sheet, with total assets increasing by $1.7 billion to $4.7 billion.

Despite an intense focus on cost control, Mr Franklin says there were some
increases in expenses due to subsequent operational and growth activity.

"Vector's interim result was impacted by higher operating expenditure,
primarily transmission costs, and additional financing costs. Increased
electricity consumption and peak demand on the networks saw an increase in
Transpower charges and the company also incurred additional costs in other
areas such as local council rates and regulatory expenses."

Vector's net interest costs also rose during the period due to the incre

[rmbbrave]

Don't you think $43m in profit is a little low for a company with $3 billion in assets? That's about 1.4%.

If you owned $3b worth of office buildings you'd be hoping for $300m in profit or 10%.

[Snow Leopard]

Of that $3b only $2.2b is property, plant and equipment and it is a half year result (although the good half).
There is a lot of infrastructure with this game but at least it generally lasts a long time.

PS Contact has $3.9b of pp&e and they acheived $144m for a year.

[wsheridan]

yes, nothing in this result to suggest accumulation of bonds has not been a good strategy

[rmbbrave]

quote:Originally posted by Paper Tiger

Of that $3b only $2.2b is property, plant and equipment and it is a half year result (although the good half).
There is a lot of infrastructure with this game but at least it generally lasts a long time.

PS Contact has $3.9b of pp&e and they acheived $144m for a year.

Contact's profit/asset ratio of 3.7% is not very good either.

Do many analysists use a profit/asset ratio to value companies?

[ananda77]

wisheridan:

yes, nothing in this result to suggest accumulation of bonds has not been a good strategy

Yes, at times, even a blind chicken like me finds a grain

[Sideshow Bob]

I received a letter yesterday as a bondholder from a company called 'Ross Investments':

Dear Bondholder,

We are writing to you as a bond holder in Vector Ltd.

Ross Investments buys securities in companies and trusts which have financial problems and/or which have a limited market. We also provide small shareholders with a facility to exit their investment economically. Hence wqe are writing to you with an offer to buy all your Capital Bonds in Vector Ltd.

Our offer is 90.5 cents per Capital Bond. Details of the offer are shown below. Upon recipt of your duly signed and dated transfer form, a cheque together with a contract note for the sale with be mailed to you within 5 working days. You will receive the TOTAL amount shown in the box 'Value of this offer'.

In deciding whether to sell, please consider the following:

- Accepting this offer gives you IMMEDIATE CASH which should be TAX FREE to you.
- There are no costs to you eg brokerage/commission, in selling your capital bonds to Ross Investments.
- Your acceptance of the offer will finalise your involvement with Vector (unless you hold a series of bonds.

Etc etc....

Yours sincerely

Robert D Ross
General Manager

I am not considering selling, and wish I had some more - especially if paying 90.5 cents!! I have only got a few - $5K which is currently worth about $5,475 (less commission), which is about a grand better than their offer of $4,525.00.

There is a ready market for these, and they are almost implying that the company is in financial problems. Suppose also banking on the fact holders may not necessarily know about the potential of a partial sharefloat, and likely preferential allocation to bondholders.

I am going to give them a call tomorrow - just hope no little old ladies, or anybody else for that matter, accept the offer!

SSB

[rmbbrave]

They tried the same with Brierly Bonds.

Offered to buy them at well below market price - 80 cents or something when they were trading for close to a dollar. Amazingly some people did take up their offer even though they could have sold their bonds for more on the market even after paying brokerage.

In the end my broker sent me a letter saying not to sell to Ross Investments.

[whatsup]

Sounds as Ross Investments is a Nigerian investment scam?