around the traps ... with the ferret

  1. 4,756 Posts.
    Around the Traps ... with THE FERRET
    08:02, Monday, 21 February 2005

    Sydney - Monday - February 21: (RWE Australian Business News) -
    ******************************

    ZINIFEX (ZFX) issued a crackerjack result on Friday, so no-one's
    complaining, but some punters may have been puzzled by the company's
    claim that, "in accordance with previously stated intentions, the
    directors have determined that a portion of this cash is surplus to the
    needs of the company and should be returned to shareholders".

    The "return" seems to consist of Zinifex's intention to conduct
    an on-market buyback for $70 million.

    Even if the return is meant to be a rise in EPS, it's a drop in
    the ocean considering it will buy back less than 22 million of the 500
    million shares on issue.

    However, there were some "returns" for shareholders on the
    market on Friday with the shares rising 12c to a record $3.18 at one
    stage.

    The stock slipped to close at $3.09.

    The market was reacting to Zinifex's first-half net profit of
    $89 million, which was 87 per cent of the previously forecast full-year
    result of $102 million, but which is now forecast to be $190 million.

    This will be equal to EPS of at least 37c, which puts Zinifex on
    a forward p/e of less than 9 times.

    *****

    How "very" is "very" at MACQUARIE BANK (MBL)?

    That's the question tempting investors after the bank's CEO,
    Allan Moss, told an analysts' briefing he expected the second-half
    result to March 31 to be "very substantially" higher than the previous
    corresponding period.

    He also said all major businesses were performing "very well".

    The market decided to play safe and assume "very" meant, well, a
    heck of a lot.

    Buyers rushed MacBank shares up $1.72 to a record $49.75, an
    increase in market value of $380 million.

    In the last full year to March 31 2004 MacBank lifted net profit
    48 per cent to $494 million.

    The first half to September 30 had been up 32 per cent to $242
    million so the second half must have contributed $252 million.

    If a "very substantial" increase were, say, double (hey, why
    not!), then the second half this year would contribute $504 million
    which, with the first half's $284 million, would make $788 million for
    the year.

    It would be a rise of more than 57 per cent.

    Now that's worthy of the description "very substantial",
    particularly when compared with the already "substantial" 48 per cent
    rise last year.

    *****

    While MacBank shareholders were throwing their hats in the air,
    one part of the empire was not happy, Mac.

    MACQUARIE COUNTRYWIDE (MCW) units were $2.12 ahead of the
    trading halt last week for the announcement of the $3.5 billion shopping
    centre splurge in the US and the 6-for-11 issue and placement at $1.85 a
    unit, seeking $843 million.

    When trading resumed on Friday the price plumbed $1.85, wiping
    out most of the year's capital gains, before firming to close at $1.91,
    down 21c for the day.

    It must have been low-placement-price angst.

    It's a common phenomenon.

    Still, unitholders can always take up the entitlement to the
    issue.

    They can't trade the rights but the PDS (Product Disclosure
    Statement, of course) says "Your rights may have value" and this will
    be distributed to non-participants in the issue.

    *****

    We're all for continuous disclosure but it can get a bit much at
    times.

    TELE-IP (TEE) announced on Friday it expected to over-achieve
    the $7 million year revenue projected in the August update and will
    report about $7.2 million, a rise of 59 per cent.

    It will still lose $1.5 million.

    The financial statements will be released "at the end of
    February", which is only a week away.

    It could just about have waited.

    However, the shares rose 0.6c to 3.5c, so maybe not.

    *****

    It's no race, VECOMMERCE (VCM) is the winner of the interim
    profit stakes.

    Last week it proudly announced bottom-line profit was up 5,356
    per cent and described that as merely "strong" growth (not even "very
    strong").

    It rose from $9,000 to $491,000.

    The shares rose 15c to $1.75 on the strength of the result.

    *****

    Print aspirations for Internet pioneer REALESTATE.COM.AU (REA)
    did not go down well with the market.

    Shareholders were rejoicing on the Thursday before last when the
    shares hit a record $2.30 (up 30c on the day).

    This followed the announcement of a $2 million half-year profit,
    which was a 28 per cent rise over the June half and 125 per cent on the
    previous December half.

    Revenue shot up 92 per cent to $15.2 million.

    But then last Tuesday the company may have ruined it all when it
    announced a print publishing trial with the launch of a Property Guide
    for the eastern suburbs of Sydney.

    The shares went on the skids and investors' ears must have been
    popping on Friday morning when the price plumbed $1.54.

    A late rally restored the stock to $1.90, a 14c rise for the
    day.

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

    ENDS

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