for tempo fans - yld. 7.3% - stock to watch

  1. 635 Posts.
    The major NZ contract announced yesterday could put some tempo into the TEM share price.

    At ~7.3% yield (over 10% incl. the franking) Tempo is a good earner for those investors looking for fully franked dividend. Holding TEM long term in SMSF.

    Any opinions ??
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    Stock to Watch: TEMPO SERVICES
    10:29, Tuesday, 17 June 2003

    Sydney - Tuesday - June 17: (RWE)
    --------------------------------
    CLEANING COMPANY WINS BIG CONTRACTS
    FOR WESTFIELD CENTRES IN NEW ZEALAND
    Overview:
    ---------
    Tempo Services Ltd seems to be going from strength to strength,
    especially in business expansion.
    The company is moving into New Zealand after winning a major
    contract to provide cleaning and building services for 10 Westfield
    shopping centres.
    A media report overnight that the unions were after Mr Frank
    Lowy's Westfield group for paying below-union rates for cleaners, had
    nothing to do with Tempo, according to chairman Mr John Schaeffer.
    He assured RWE that the company paid award rates and had "no
    beef" with the unions, with whom it had a good working relationship.
    The good news for shareholders is that Tempo last month
    announced it would pay a fully franked special 5c dividend on June 20,
    in addition to the fully franked 4c interim dividend paid on March 28.
    The company will continue to keep dividend policy under review,
    after a record net profit of $6.35 million for the six months to
    December 31.
    Meanwhile, the latest business coming the company's way a
    $NZ15 million three-year contract which covers eight Westfield centres
    in Auckland, one in Hamilton and one in Christchurch.
    Tempo points out it has an established relationship with
    Westfield, providing services to 22 of its shopping centres throughout
    Australia.
    The company has strengthened its top management team following
    the New Zealand expansion.
    Mr Schaeffer reports that Mr Tony Carmona has joined the company
    as group general manager with overall responsibility for New Zealand,
    NSW and WA.
    Mr Carmona was previously national general manager of operations
    in Spotless Services's Australian property division.
    "We are confident we can expand our business in this region," Mr
    Schaeffer said.
    In March, Mr Schaeffer described the half-year result as
    "demonstrating the underlying strength of the group and its ability to
    achieve consistent growth in market share and earnings".
    "We are confident we will report another profit increase for the
    full year to June 30.
    "Our cleaning and building services division increased its
    profit contribution and continues to strengthen its position as
    Australia's largest cleaning business," Mr Schaeffer declared.
    He disclosed that the company had extended its major contract
    with the NSW Department of Public Works and Services.
    ----------------------------------
    Share price: $1.75
    High/low for year: $2.60/$1.41
    Dividend: 13c including special 5c
    Dividend yield: 7.3 per cent
    -----------------------------------
    Background:
    -----------
    Tempo Services is a multi-service group operating in five
    specialist divisions: security, cleaning and building services,
    couriers, concierge, and services to companies and government including
    catering, facility management and health.
    Tempo is picking up business as corporations and government
    increasingly outsource these roles to focus on their own respective
    expertise.
    Tempo integrates these services to suit each client's needs.
    It joined the ASX lists in June 1994.
    Health care and defence are two areas Tempo has identified and
    targeted for future growth.
 
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