around the traps ... with the ferret

  1. 4,756 Posts.
    Around the Traps ... with THE FERRET
    07:25, Wednesday, 19 January 2005

    Sydney - Wednesday - Jan 19: (RWE Australian Business News) -

    About a year or so ago the pundits were writing wisely about
    how property trusts would run out of puff.


    Yesterday JF MERIDIAN TRUST (JFM) issued its second earnings
    upgrade in a little over two months.

    JFM says that as a result of the strong performance by the
    equity and listed property trust portfolio over the past six months,
    along with the performance of JFM's mortgage portfolio, management has
    revised its earnings guidance for the June 30 year from the 11c to 12c
    a unit range announced in November to a 14.5c to 15c range.

    That's an amazing 25 per cent increase in guidance in a
    remarkably short time for a trust.

    Interim distribution forecast is up from 4.93c to 5c a unit and
    there will a special one-off distribution of 3c.

    The JFM announcement was made after the close.

    The units had finished at a steady $1.31, which is up from
    about $1.20 at the time of the first upgrade in November.


    It's good to see ASIC on the case.

    Babcock and Brown Capital, which is seeking $1 billion, had to
    delete the following from its prospectus:

    "The Company's principal objective is to achieve a Total
    Shareholder Return of 15% per annum compounded with a comfortable
    'margin of safety'."

    ASIC thought the statement could be construed as a forecast and
    not a target as intended by directors.


    Publicity over a long-running court battle cut McPHERSON'S
    (MCP) 18c to $5.63 yesterday but the stock has had a big year, climbing
    from $4.68 to a record $6.05 on January 4.

    It's up from $5.27 when we wrote it up in October.

    It had just risen 39c on the news that it had gone on an $86
    million spending spree when it acquired Multix from AMP Investment
    Services for $70 million (with $10 million satisfied by the issue of
    2.22 million McPherson's shares at $4.50 each) and Accantia Health &
    Beauty from ANZ for $16 million.

    Multix markets products in the household plastic bags, wraps
    and foil category in Australia.

    Accantia markets personal care products including cotton
    products (balls, tips and pads) and facial and baby wipes in Australia.

    McPherson's said the acquisitions "were expected to be earnings
    per share positive this year and to provide volume and profit growth
    opportunities in subsequent years through the realisation of synergies
    with existing businesses".

    The market obviously agreed.


    PROSPERITY RESOURCES (PSP) may be a great mining explorer but
    it's struggling with its plurals and its commas and apostrophes.

    Yesterday it said it "wishes to advise that the short RC drill
    program completed before Christmas at the companies, Yalgoo North
    Project involving the Don Bradman prospect has intersected encouraging
    gold results near surface ..."

    The shares are struggling, too, with the stock losing an early
    rise to 12.5c to close down 0.5c to 11.5c.


    Did CRESCENT GOLD (CRE) think it made the company's share price
    look bigger?

    Yesterday it announced a placement and 1-for-5 issue at $A0.135
    a share.

    We thought 13.5c would have been simpler.

    It's another goldminer issue that's not going to be too popular
    because the shares, after an initial 1c (sorry, $A0.01) rise to 14c,
    closed at 13c, a $A0.005 discount to the issue.


    We've ruminated a bit recently over the scale ordinary
    investors are supposed to apply to the wide range of often flowery
    words used by companies.

    Unfortunately COUNT FINANCIAL (COU) added to the confusion
    yesterday when it issued a new statement because "We have been asked to
    clarify our profit guidance."

    (Who asked? The ASX?)

    Count says that in Quarterly Business Report last Thursday it
    upgraded guidance by stating that "... in the absence of any
    significant adverse event, the FY05 result will most likely exceed the
    advised EBIT target of $14.1 million - up 30 per cent on FY04.

    "We will provide further guidance with the release of our half
    year results on 15 February 2005."

    It also made comment on the likely 1H05 result and said, in
    part, "... will result in Count Financial Limited next month reporting
    a substantially increased first half Operating Profit (EBIT)".

    Count said that by "substantially" it meant more than 50 per

    Well we now know what scale to apply to "substantially", at
    least as far as Count is concerned, and in regard to guidance.

    But shareholders should remember that elsewhere, "substantial",
    as least as far as shareholdings are concerned, is more than 5 per

    Getting back to Count ... "Our 1H04 EBIT was $4.04 million and
    therefore 1H05 will be more than $6 million.

    "How much above $6 million is not yet known, but it is likely
    to be around the middle of the $6 million to $7 million range."

    But then Count goes and muddies it all up by saying that if the
    "1H05 is unlikely to be in this range we will advise the market
    immediately it is known".

    Count rose 2c to $1.37.

    (Comments and complaints to [email protected] - no requests
    for advice please.)


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