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12-03-2021, 06:05 PM
#821
Yes the other thought that came to mind was ...if we weren't paying him so much there may be room to increase the dividend.... Another unfortunate example of excessive salary for sub-optimal performance.
Originally Posted by Southern Lad
Really positive to see Andrew Miller shell out $639,200 to purchase 800,000 shares for an average of 79.9 cents per share. The other 166,666 shares look like it is a transfer from Andrew's personal name to a Trust. Market has responded accordingly by pushing the last traded price to 82 cents this afternoon.
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29-06-2021, 01:23 PM
#822
Anyone noticed the little creeping share price appreciation?
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29-06-2021, 01:38 PM
#823
Originally Posted by tim23
Anyone noticed the little creeping share price appreciation?
Share price might get to $1 one day ……soon?
”When investors are euphoric, they are incapable of recognising euphoria itself “
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29-06-2021, 02:36 PM
#824
Member
Perhaps someone with the right skills could change the Thread name to it's new name "Vital"
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29-06-2021, 03:02 PM
#825
Member
Originally Posted by tim23
Anyone noticed the little creeping share price appreciation?
Sure have. Nice timing by the CEO when he bought that line a few weeks ago.
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24-07-2021, 08:30 PM
#826
Originally Posted by Southern Lad
The adoption of IFRS 16 will significantly increase EBITDA but not Net Profit.
I wonder if anyone got to the bottom of the implementation of IFRS16 on leases on the Vital result from 2020? The answer to this question is not trivial as it affects the adjusted Net Profit after Tax by between 60% and 109%.
From AR2020 p4
"As with our interim results earlier this year, IFRS 16 which although non-cash impacting does impact our results. Our Net Profit after Tax at $0.734m takes into account the IFRS16 impact to Net Profit after Tax of ($0.44m)."
However, this is the only time the figure $0.44m appears in the annual report. So where did it come from?
From AR2020 p17
"For judgements relating to NZ IFRS 16 refer to the Changes in Significant Accounting Policies (Note 3a), and the disclosure notes in relation to Leases (Note 21)."
Note 3 talks about changes to the balance sheet. But in note 21 there appears the following table:
|
2020 |
2020 Leases Under IFRS16 |
Interest on Lease Liabilities |
$1.412m |
Expense Related to Short Term/Low Value Leases |
$0.219m |
Depreciation of Right-to-use Asset |
$5.619m |
2019 Leases Under NZ IAS 17 |
Lease Expense |
$6.136m |
Now what I think this table is saying is that under IFRS16, the total lease expenses are:
$1.412m+$0.219m+$5.619m= $7.250m
WHEREAS under NZ IAS 17, the lease expenses would have been $6.136m.
This means upon adopting the IFRS16 standard, lease expenses have increased by: $7.250m - $6.136m = $1.114m
As a result NPAT would reduce by 0.72x$1,114m = $0.802m.
That is rather more than the $0.44m reduction suggested on AR2020 p4. So I remain confused :-(
SNOOPY
Last edited by Snoopy; 24-07-2021 at 08:47 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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25-07-2021, 07:50 PM
#827
Originally Posted by Snoopy
I wonder if anyone got to the bottom of the implementation of IFRS16 on leases on the Vital result from 2020? The answer to this question is not trivial as it affects the adjusted Net Profit after Tax by between 60% and 109%.
From AR2020 p4
"As with our interim results earlier this year, IFRS 16 which although non-cash impacting does impact our results. Our Net Profit after Tax at $0.734m takes into account the IFRS16 impact to Net Profit after Tax of ($0.44m)."
However, this is the only time the figure $0.44m appears in the annual report. So where did it come from?
From AR2020 p17
"For judgements relating to NZ IFRS 16 refer to the Changes in Significant Accounting Policies (Note 3a), and the disclosure notes in relation to Leases (Note 21)."
Note 3 talks about changes to the balance sheet. But in note 21 there appears the following table:
|
2020 |
2020 Leases Under IFRS16 |
Interest on Lease Liabilities |
$1.412m |
Expense Related to Short Term/Low Value Leases |
$0.219m |
Depreciation of Right-to-use Asset |
$5.619m |
2019 Leases Under NZ IAS 17 |
Lease Expense |
$6.136m |
Now what I think this table is saying is that under IFRS16, the total lease expenses are:
$1.412m+$0.219m+$5.619m= $7.250m
WHEREAS under NZ IAS 17, the lease expenses would have been $6.136m.
This means upon adopting the IFRS16 standard, lease expenses have increased by: $7.250m - $6.136m = $1.114m
As a result NPAT would reduce by 0.72x$1,114m = $0.802m.
That is rather more than the $0.44m reduction suggested on AR2020 p4. So I remain confused :-(
I am one step closer to solving this. I decided to re-look at the AR2020, to see if there were any clues that I had missed. Sure enough there was.
"The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low value assets. Lease payments on these assets are expensed to profit and loss as incurred."
That means no 'right of use asset' has been created for short term leases and leases of low value. IOW the accounting treatment of these assets is just the same as before. So I need to remove any lease expenses as they relate to short term leases and leases of low value from my calculations.
|
2020 |
2020 Leases Under IFRS16 |
Interest on Lease Liabilities |
$1.412m |
Depreciation of Right-to-use Asset |
$5.619m |
2019 Leases Under NZ IAS 17 |
Lease Expense |
$6.136m |
Now what I think this table is saying is that under IFRS16, the total lease associated expenses are:
$1.412m+$5.619m= $7.022m
WHEREAS under NZ IAS 17, the lease expenses would have been $6.136m.
This means upon adopting the IFRS16 standard, lease expenses have increased by: $7.022m - $6.136m = $0.886m
As a result NPAT would reduce by 0.72x$0.886m = $0.638m.
That is still more than the $0.44m NPAT reduction suggested on AR2020 p4. So I remain confused :-(
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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26-07-2021, 10:08 PM
#828
BT1/ STRONG MARKET POSITION (Top 3 in chosen market sector) [perspective FY2020]
'Vital', as this company was rebranded in 2019, is a small niche overlooked share (you can tell that because since the company name changed from Teamtalk a couple of years ago, no-one has bothered to update the thread title). This indicates to me it might be 'worth a snoop'. So let me introduce them to you as a provider of infrastructure and communication services.
Vital has two divisions:
1/ 'Wired Networks' that principally consists of two wholesale fibre communication networks, one around the CBD in Wellington (acquired) and the other around the CBD in Auckland (built in house). Originally branded as 'Citylink', the Wellington network in particular, 32km of the 250km total, has been extensively rebuilt in the last few years. The 'old overhead cables' - that piggy backed on the now retired trolley bus line network - have migrated underground. They now goes through the old Powerco subterranean gas ducting. Of course the electronics on the end of the fibre have concurrently been updated to produce a more flexible product package range that tops out for maximum speed at 10Gbps (slightly higher than the maximum 8Gbps offered by top line Chorus hyperfibre). 'Citylink' serves business (including Dimension Data and Datacom) and the telecommunications industry (including Spark, Vodaphone and 2 degrees). Vital have a TAAS (Telecommunications as a service) contract with the Department of Internal Affairs to deliver telecommunications services for all government agencies. Further, 'Citylink' are contracted to operate Wellington's free Wi Fi service throughout the CBD. They also offer cloud based data storage capability to customers in Wellington and Auckland, and provide peering exchanges for ISPs to share data.
The original 'Citylink' Network was sold by the Wellington City Council in 1999 to investment firm 'Active Equities'. It was subsequently acquired by Teamtalk (as Vital was named then) in 2006.
2/ 'Wireless Networks' is New Zealand's only nationwide wholesale radio network for voice and data traffic, and it operates in the microwave spectrum. This division operates three networks, (1) 'ActionNet' the legacy network that is in the process of being replaced by a (2) new digital radio network equivalent (engineered by Tait Electronics of Christchurch). Customers may be found in the Civil Defence, Emergency Services, Health, Utilities, Public Transport Education and Logistics and Freight sectors. 'Wellington Electricity' and "Auckland Airport' are two of the more high profile customers. There is a dedicated network for emergency services too, with a new contract just signed for St Johns. In 2016, Vital launched (3) 'RT max' as an affordable entry level digital radio service based on Motorola's 'Linked Capacity Plus' technology.
A significant capital raise of $8.2m was made in FY2019 to go towards funding these upgrades, and a new computerised management system to support them. The current company policy (AR2019 p2) is to pay out 50-70% of NPAT as dividends to ensure enough cash is retained to keep investing in the networks.
For those students of history, there was a third division 'Farmside' that concentrated on selling satellite and fixed wireless internet in rural areas. However this division was sold to Vodaphone in two tranches of 1/ 70% on 1st June 2017, and 2/ 30% on 31st May 2018.
Conclusion: As (1) the only nationwide wholesale provider of a digital radio service and as (2) one of the top three in the fibre Wellington market (with Vodaphone and Chorus) and Auckland (with Vector and Chorus) , Vital PASSes this first test.
SNOOPY
Last edited by Snoopy; 28-07-2021 at 10:32 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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27-07-2021, 10:35 AM
#829
BT2/ INCREASING EARNINGS PER SHARE TREND (one setback allowed) [perspective 2020]
eps = Normalised Profit / No. Shares on Issue at End of Financial Year
FY2016: 0.72( $4.569m + $0.229m ) / 28.369m shares = 12.2cps
FY2017: ($4.144m - 0.72($0.457m) ) / 28.369m shares = 13.5cps
FY2018: ($4.512m - 0.72($0.195m) ) / 28.369m shares = 15.3cps
FY2019: ($4.054m + 0.72($0.205m) ) / 41.381m shares = 10.2cps
FY2020: ($0.734m + $0.44m +0.72($0.211) ) / 41.381m shares = 3.2cps
Notes
1/ FY2016, FY2017 and FY2018 results have had operating returns from the now sold 'Farmside' division removed. Any profits from the sale of this division have also not been included in these earnings figures.
2/ In every year I have adjusted for the 'after tax effect' of any gain or loss in the fair value of derivatives (found in the 'Finance and Expense' note in each respective annual report).
3/ In FY2020 I have added back the claimed 'after tax effect' of the adoption of adoption of IFRS 16 on the treatment of leases. Reading p4 of AR2020, the contempt with which IFRS 16 is held is remarkable. The Chairman in effect says it is a non-cash adjustment that should be ignored!
4/ For years FY2016 and FY2017 I have changed the tax rate to the standard corporate rate of 28%. This removes the effect of previous years tax losses skewing the operational results for the current year.
Conclusion: Things were going well until the 'set back' of FY2019, which was 'Covid compounded' by the deferring of customer upgrades in FY2020. FAIL test!
SNOOPY
Last edited by Snoopy; 27-07-2021 at 07:12 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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27-07-2021, 10:51 AM
#830
BT3/: RETURN ON EQUITY (>15% for five years, one setback allowed) [perspectiveFY2020]
Return on Equity = Normalised Profit / End of Year Shareholder Funds
FY2016: $3.455m / $20.209m = 17.1%
FY2017: $3.815m / $25.327m = 15.1%
FY2018: $4.372m / $29.766m = 14.7%
FY2019: $4.202m / $42.095m = 10.0%
FY2020: $1.326m / $41.740m = 3.2%
Conclusion: You could say within rounding errors that things were OK until the 'setback' of FY2019. This was then compounded by an even bigger setback in FY2020. FAIL test!
SNOOPY
Last edited by Snoopy; 27-07-2021 at 11:09 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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