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| Sunday, May 17, 10:30:06am | [ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time | Archives: 1, 2, [3], 4, 5, 6, 7, 8, 9, 10 ] |
| Subject: Paterson Ord Minnett, the only broker still following the ticketing vendor - and which is advising ERG on the restructure - said the company could report a $17 million profit on revenues of $300 million to $350 million next year. | |
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Author: May 16 2003 |
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Date Posted: Sunday, June 01, 03:11:39am In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am http://www.smh.com.au/articles/2003/05/15/1052885346472.html ----------------------------------------------------------- Bunnings stuck with unsold stockMay 16 2003 ----------------------------------------------------------- Wesfarmers has been hammered recently. UBS Warburg nails the reason: Bunnings. ----------------------------------------------------------- Home handyman types will be keeping a close eye on Wesfarmers in the hope of picking up a cheap angle grinder, garden rake, or cordless drill following talk of a build-up in inventories. ----------------------------------------------------------- Management of Wesfarmers' Bunnings hardware stores warned analysts on this week's investment tour in Melbourne of a $30 million charge during the next 12 months to cover that hard-to-shift-ware. ----------------------------------------------------------- That's in addition to the $150 million charge Wesfarmers took to provide for obsolete stock and store closures when it bought Howard Smith two years ago for what is now looking like a pricey $2.7 billion. ----------------------------------------------------------- Many believe these extra write-downs are nothing to worry about and, says Macquarie Equities, "the growth story remains intact" despite slowing trade sales. ----------------------------------------------------------- UBS Warburg, however, appears to want to spoil the garden party by warning that there could be a lot more inventories sitting out the back of the shop than anyone realises. ----------------------------------------------------------- UBS, which a few months back was one of the first to pick a slowdown in demand for picks and shovels, estimates there is perhaps some $240 million in excess stock in the full network of stores. That's almost a full month of sales. ----------------------------------------------------------- Management sheepishly admitted to the analysts that it probably needs to introduce some new system to keep track of inventory. At the same time, UBS is also cautious about slowing demand for hardware and has had a "reduce" rating on Wesfarmers for a while now, with a target of $19. ----------------------------------------------------------- The stock closed at $23.70. ----------------------------------------------------------- UNiTAB is flying ----------------------------------------------------------- A flurry of corporate activity in recent weeks has reignited speculation about some longstanding takeover targets, including Burswood and UNiTAB. ----------------------------------------------------------- A 30 per cent downgrade in forecast full-year profit delivered early this month has failed to dampen enthusiasm for Burswood, which will have a 10 per cent cap on its shareholdings lifted in September. ----------------------------------------------------------- While most market observers expected shares in the Perth casino to plunge 10c after the profit warning, speculation about its future has helped the shares rise 7c to 78c over the past nine trading sessions. ----------------------------------------------------------- Rumours about UNiTAB and NSW TAB have been turned on their head recently, with some market observers now discussing a possible move by UNiTAB for TAB. ----------------------------------------------------------- Previously, TAB, which has a market capitalisation of $1.5 billion compared to UNiTAB's $378.2 million, has been touted as a potential buyer of the Queensland betting shop once ownership restrictions are lifted in September next year. ----------------------------------------------------------- But while such rumours circulate, the share price movements of the two stocks certainly don't support the new takeover scenario. UNiTAB shares have risen 89c this month to $6.09, while Tab has gained a mere 1c to $3.24. ----------------------------------------------------------- No urge for ERG ----------------------------------------------------------- ERG's recapitalisation is due to take place over the coming weeks, with $250 million worth of convertible notes being exchanged for 1.6 billion shares in the company. ----------------------------------------------------------- But the market is still showing distaste for ERG's market-listed securities, which are trading much lower levels than the predicted 15c, which represents the nominal share conversion rate of the notes. ----------------------------------------------------------- Shares are trading near all-time lows below 9c, with the notes similarly weak at marginally above $7. ----------------------------------------------------------- With each note converting to 90 ordinary shares in ERG, note holders are still favoured in the equation, effectively picking up shares at just under 8c each at recent prices while shares closed yesterday at 8.7c. ----------------------------------------------------------- These prices compare to an estimated net asset backing of 11c per share after the recapitalisation. ----------------------------------------------------------- Paterson Ord Minnett, the only broker still following the ticketing vendor - and which is advising ERG on the restructure - said the company could report a $17 million profit on revenues of $300 million to $350 million next year. ----------------------------------------------------------- If market sentiment has improved by then and ERG doesn't continue its track record of disappointment, the result could underpin a share price of 15c to 20c based on current market earnings ratios, the broker said. ----------------------------------------------------------- Lucas out of hole ----------------------------------------------------------- Nearly two years since getting seriously burnt from its investment in the failed Smart Communications, it appears horizontal driller AJ Lucas has been forgiven for its foolhardy attempts to diversify. ----------------------------------------------------------- In two weeks, shares in the group have risen 13 per cent. AJ Lucas has a strong financial base with a year left in its contract to build the $170 million SEA Gas pipeline between Victoria and South Australia. ----------------------------------------------------------- There is a rush of gas projects coming on line, so it appears the best lesson AJL has learnt from the Smart fiasco is stick to what you know. ----------------------------------------------------------- Burdett Buckeridge Young's Adam Michell has forecast a 2002-03 net profit of $8 million, compared to the previous $2.8 million. ----------------------------------------------------------- With AJ Lucas eyeing opportunities to use its non-intrusive drilling techniques for cables and waterpipes in built-up areas, BBY says the real ace up its sleeve could be its ability to extract methane gas from coal seams. ----------------------------------------------------------- The company's drilling program in the Gloucester Basin coal-bed methane field in the Hunter Valley could be worth about $1.40 a share. ----------------------------------------------------------- Edited by Jan Eakin [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Subject: officially cancelled its proposed $50 million rights issue,troubled company's recapitalisation plans.26/06/2003 | The Australian Financial Review | Monday, July 07, 11:19:39am |