around the traps ... with the ferret

  1. 4,756 Posts.
    Around the Traps ... with THE FERRET
    07:25, Thursday, 24 February 2005

    Sydney - Thursday - Feb 24: (RWE Australian Business News) -
    ***************************

    Over in the mining market they were celebrating the soaring
    price of iron ore.

    But at the other end of the line, shareholders of PACIFICA
    (PBB) were cursing the steel surcharge that will be imposed on the
    company's PBR operation to reflect movements in the base cost of steel.

    Pacifica yesterday announced a net profit of $45 million for
    the year to December, which was $1.7 million lower than 2003, but $1
    million higher than the guidance provided in late December.

    That guidance knocked the shares down from $3.60 to $3 in a
    day.

    Yesterday the shares bounced back 12c to $3.12, probably in
    relief the profit did not go below guidance.

    It's still going to be hard going for Pacifica.

    The company reminded shareholders that in December it said it
    expected that 2005 would be a difficult year and that its results would
    be adversely affected by lower volumes and price pressures in North
    America, as well as increasing raw material costs.

    Directors yesterday reaffirmed the earnings guidance provided
    in December, of a 2005 net profit, before significant items, in the $34
    to $38 million range.

    *****

    Ken on the email wonders if this is an omen.

    In Perth the ASX All Ords index lights on top of the ASX
    building are out ... for the eighth day.

    Is this a pointer to the ASX in general or to ASX the company?

    The lights went out about the same time as the All Ords started
    sliding.

    *****

    There are some stocks investors just lurve to love to death.

    One of them is CSL.

    They rushed the stock up $1.20 to $31.99 yesterday after the
    company announced a 531 per cent rise in first-half net profit to $160
    million, a dividend rise, a 5 per cent buyback, and an upgrade from a
    market consensus of $270 million net profit for the year to between
    $270 and $295 million.

    The good news had been thoroughly anticipated and CSL was
    boosted to as high as $33.01 on February 7 before falling to $30 on
    February 15.

    At yesterday's close the stock was on a fairly high forward p/e
    of more than 21 times but that was downright cheap compared with the
    multiples the market was paying when CSL was soaring above the $90 mark
    a few years ago.

    *****

    PERPETUAL TRUSTEES (PPT), which soared as high as $68.50 on
    February 3 in "anticipation" speculation ahead of expected hot
    half-year results - the shares were $41.50 a year ago - must have been
    paying the price of "realisation" yesterday.

    The company announced a "record increase" (you don't often see
    companies claiming a record for the actual increase) in operating
    profit after tax of 31 per cent to $54.3 million.

    Net profit after tax was even better, up 58 per cent to $66.8
    million (including one-off costs of major strategic initiatives and
    realised gains on the sale of investments).

    Yet the shares slumped $2.63 to $59.40.

    The stock doesn't seem expensive.

    After first-half EPS of 172c, Perpetual is probably on a
    forward p/e of about 14, which is the market average.

    *****

    On ABC radio the other day, the presenter and the guest
    columnist were about to have their weekly discussion about the world of
    business.

    Our ears pricked up, expecting maybe something on the booming
    profit reports, the takeover battles, the resources boom, anything
    about shares, the market ... nope ... the subject was the ratings
    battle between the two Kerrys' Seven and Nine.

    And the second item for discussion?

    John Elliott (good grief, we already know more about him than
    is normal) and, wait for it, his upcoming interview on 60 Minutes (back
    to bloody TV again!).

    The meeja loves nothing better than talking about the meeja
    (unless it's airlines).

    *****

    We got to thinking about meeja after NETWORK's (NWK) interim
    results announcement yesterday.

    Commenting on the year ahead, CEO Brendon Cook said the advent
    of digital television and the personal digital recorder was expected to
    dramatically alter audience viewing habits over the next decade.

    Mr Cook said, "The resulting change in audience volumes is
    expected to affect significantly the demand for television as an
    advertising medium and consequently increase demand for existing, as
    well as new, outdoor billboard advertising in Australia.

    "Network has a strong and competitive brand and asset position
    within outdoor media in Australia and we aim to continue our growth as
    a significant operator in this sector over the next three to five
    years."

    Is Mr Cook indicating that in the digital age TV ads will be
    less effective, and Network is ready to move in?

    Network shares rose 3.5c to 23.5c on the back of a turnaround
    from a loss of $1.2 million to a net profit of $1.45 million.

    (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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