I have been very critical of Telstra over the years, but as a current dividend stock, it remains a very good utility. Why, the buy? Because of the effects of Sigma Six which will catch on in detail during 2H,cy04.
As for iiNet, my comments represented a quick synopsis of the situation. At the net profit end, it is fully valued (perhaps, over valued). Future price potential, therefore, depends heavily on securing the cost efficiencies from the recent acquisitions, etc, and further growing the business.
My point with SWT is that existing shareholders are giving up far more of the pie than is deserved. This means that PTL is picking up more of the merged entity but is contributing less to the outlook.
I would have preferred seeing a 45:55 split of SWT to PTL (if not a 50:50 split, as my numbers yesterday, demonstrated).
Clearly, PTL is far bigger on revenue, but smaller of profit and on margins.
As you can tell, I look well and truly beyond the revenue numbers.
In terms of markethare, the combined entity does not attract more than 0.25% of the Australian market. Even if the combined SWT /PTL tripled in forecast size (ie: to $500M), they would only approximate 2.5-3% of the market.
