Ann: Acquisition of OptiComm Limited and Equity Raising, page-79

I did notice in Opticomm Prospectus; Section 5.1, it notes one of the risks being;

Downturn inhousing market
"The growth and performance of OptiComm will be influenced by the overall housing market and generaleconomic conditions in Australia which are, by their nature, cyclical and subject to change. This includesunderlying housing shortage/demand, immigration numbers, access to finance, interest rates, houseaffordability, first home buyer incentives, land availability and government policy.A downturn in the Australian housing market may result in cancellation or deferral of housing projectswhich may adversely impact OptiComm’s financial performance as it would reduce construction revenue.A short term downturn in the housing market is not expected to materially impact OptiComm’s forecastperformance in FY2020 due to the construction profile for this period being largely committed. Howeversome impact (reduction in construction revenue) may be experienced to the extent developers look todelay or extend construction timelines or there is a slowdown in new lot connections."

That section also puts a price on NBN Tax of $2.52M NPAT on FY20 forecasts of $22.1m NPAT, which is significant (11%), but not a problem.

IMO downturn in the housing market is more likely than not in the medium term due to reduced population growth from newcomers, but it depends how long the federal government keeps pumping cash out. (but im not a property expert), and i wonder if that was something that helped convince Opticomm to sell.

I havent read anything much about how NBN is going ot use their new powers to compete, that will be important information when it becomes known.

But on the positive side, those revenue stream should be pretty solid once construction is done, its not all about construction, good cashflow to build on, a great match for Uniti.

I still judge it a sell, mostly because although it has some good names, that has bought with it a lot of hype, and more money than might have been sensible (by contrast i think Spirit is the opposite, a quiet achiever doing it slowly). I dont like TPG either because of the big names (and shortcuts), its a personal bias probably.