kornerblok, I think CIY will probably survive but it will only be a shadow of its former size and will take many years to regain credibility.
I also believe its business model is now broken. I say that because I can't see them retaining many funds in the fmf when investors are eventually allowed to redeem. So that means the funds they will have available for lending will be much smaller. And CPK is being crippled by debt due to the underperformance of the Martha Cove development (which is running years behind the original schedule).
I was a huge fan of CIY at the start. I got in at $1.21 pre split (21c post split) back in 2001 just after they listed. For a while myself and many others thought management were first class. But then they started taking on debt and getting CIY into property development directly etc that sucks up a lot of cash flow. And their div payout was unsustainably high so they had no cash to fund the developments. They also started missing forecasts and over promising and underdelivering. (same sentiment appplies to CPK and IPA). I traded them quite a bit during the ups and downs of 2005-2006 but got out for good in early 2007 when I saw the Feb 07 interim results. That was the writing on the wall in my view. Falling margins, numbers that weren't consistent with what management had been saying, rising debt, very poor cash flow etc.
Also the acquisitions of Terrain, Treasury Group and CPPM yielded almost no profit despite them issuing heaps of shares to fund these acqusistions. Very poor due diligence it appears.
I see Peter Trathen has recently jumped ship. Their spin about him being involved only with the Townsville development was just BS. He was supposed to be heading up CPPM which was project managing all their developments. And I have doubts on how long Phil will want to stick around. He has already banked over $100m from selling his CIYO and CIYOA options a few years ago and has collected in excess of $50m in dividends. If I was him I would want to retire rather than deal with Michael West's articles every week
CIY Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held
