around the traps ... with the ferret

  1. 4,756 Posts.
    Around the Traps ... with THE FERRET
    07:37, Thursday, 10 February 2005

    Sydney - Thursday - Feb 10: (RWE Australian Business News) -

    Asked by Corporatefile why the 17 per cent rise in interim
    dividend to 7c lagged the 33 per cent rise in EPS to 25c, ANSELL (ANN)
    CEO Doug Tough said the company was focused on total shareholder
    return, comprising growing, but sustainable dividends and share price

    "TSR in the first half was 17 per cent following 34 per cent in
    2004," he said.

    "Our philosophy is to have a balanced capital management
    program, including dividends, with more of the TSR coming through share
    price appreciation."

    Now some shareholders can't live on capital growth alone but
    they would have appreciated what he meant after the shares rose 35c to
    a record $9.65 yesterday on the back of the 26 per cent rise in first
    half net profit.

    But at that level forward p/e must be nudging 20.

    Meanwhile, CFO Rustom Jilla added some perspective to dividends
    and told Corporatefile Ansell had tax losses from past years and no
    franking credits for future dividends.

    "Also, don't forget our large investment in South Pacific Tyres
    and lack of retained earnings," he said.

    "If we were to take a future book writedown, and I stress book,
    not cash, it would reduce our capacity for paying dividends in that


    RECORD INVESTMENTS (RCD) looked like another instance of that
    well-used ploy by companies to get the good news out first and keep the
    bad till last.

    A 103 per cent jump in first-half net profit and a 48 per cent
    hike in dividend was good news indeed.

    Right at the end, in the second last paragraph, the company
    said that, "On a per share basis, Record is confident of its ability to
    grow earnings and dividends over the next couple of years.

    "In the short term, in addition to the effect of repayments,
    earnings and dividends per share will be impacted by the new shares to
    be issued to Allco."

    Almost sounded like a warning.

    Apparently not, Record shares shot up 36c to $6.40.


    Should we take this as good or bad?

    CORPORATE EXPRESS (CXP) managing director Grant Harrod,
    speaking on outlook, said "Market conditions are currently stable and
    our performance to date is in line with management's expectations."

    Seems a rather flat statement, doesn't it?, coming after a
    half-year which saw net profit rise 27 per cent, and EPS from 24c to

    The market didn't think so and lifted the stock 20c to $6.20.

    It looks to be on a future p/e of only 10, a figure which will
    only improve after the off-market buyback of $50 million worth of


    SOUTHCORP's (SRP) interim profit has soared 50 per cent but EPS
    is still only 8.1c.

    CEO John Ballard said "detailed financial forecasts for the
    2005 and 2006 financial years would be included in the Target Statement
    due to be lodged with ASIC over the next two weeks".

    He reaffirmed his previous guidance to the market for modest
    earnings growth for the full year.

    Southcorp remained at $4.39, well above FOSTER'S GROUP's (FGL)
    $4.17-a-share offer, which is bidding about 26 times earnings, going by
    yesterday's results.

    Foster's edged up a further 2c to $5.44.


    XANADU WINES (XAN) was no pleasure dome yesterday after the
    company warned the market it would report a loss for the first half.

    "This result is below expectations and will affect the
    previously disclosed full year forecast of returning to profit in FY
    05," directors said.

    "The higher than anticipated loss is due in the main to lower
    than budgeted sales and margins in the November and December 2004
    months and higher than anticipated foreign exchange losses in the first
    half of the financial year."

    Well, what is it?

    In the first paragraph the loss is "below expectations" and in
    the second it's "higher than anticipated".

    Managing director Sam Atkins said although he was "very
    disappointed" with the downgrade he remained confident of a profit in
    the second half.

    But not for the full year, as the market had been led to

    Very disppointed punters slashed the shares 0.7c to 4.4c.


    COOL OR COSY (COS) issued an "Interim dividend announcement"
    yesterday and said that for the December half it would pay a fully
    franked "final" dividend of 1.6c.


    The company says this is up 12.2 per cent on the previous
    corresponding period, which certainly sounds more impressive than
    saying it's up 0.147c.


    WESTMAG (WMG) had problems with plurals.

    It said its joint venture partner (singular) in Chile,
    Patagonia Gold, have (plural) announced they (plural) will be
    terminating the JV agreement.

    Patagonia has (singular, again) been exploring the property for
    the past 16 months.

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


    Copyright © 2005 RWE Australian Business News. All rights reserved.
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