Around the Traps ... with THE FERRET
07:37, Thursday, 14 October 2004
Sydney - Thursday - October 14: (RWE)
*************************************
TEN NETWORK (TEN) is having a monster week.
First on the back of the Coalition win, and the takeover
prospects that opens up, and second in reaction to the Big profit,
Brother.
The shares are up from $3.45 last Friday to a record $3.72
yesterday, an 8c rise for the day.
Executive chairman Nick Falloon said the company had produced
its most outstanding financial performance by focusing on its core
businesses, with the television division, Network Ten, leading the way
with exceptional results and Eye Corp making a much improved
contribution.
There's that word "core" again.
Television would appear to be TEN's ONLY business other than
perhaps formerly troublesome Eye Corp, which, given it made a much
improved contribution, must also have been focused on.
Mr Falloon said that with television revenue rising 14 per cent
and earnings before interest, tax, depreciation and amortisation
(EBITDA) up 29 per cent, TEN easily retained its industry-best EBITDA
margin.
TEN has made an encouraging start to the new financial year
with television advertising revenue up 15 per cent in the first quarter
and "there are also positive signs for Eye Corp".
TEN is not exactly cheap on a p/e of almost 19 times but a
repeat of last year's perfomance this year would put it on a future p/e
about 15.
*****
While we're talking about "core", meet MBOX.COM (MBX).
Now here's a company which could face some real what is and
what is not core arguments if things don't work out in the future.
Heads were going off at Mbox yesterday.
First the company was pleased to announce it had "executed a
conditional Heads of Agreement with Fero Industries Pty Ltd in regard
to the acquisition of the Business and nominated assets of Fero
Industries' blasting and protective coating business in Kwinana,
currently trading as Novacoat".
Second, Mbox was pleased to confirm it had "executed a
conditional Heads of Agreement with Virtualplus Inc to acquire 100 per
cent of the shares in VPL.
VPL is a unified and mobile messaging solutions provider."
Now you can call us troublemakers but we fail to see a
core-ness in sand blasting and SMDS messaging.
*****
Still, Mbox says Novacoat is a leading supplier of
anti-corrosion treatment services to the mining, oil & gas, marine,
construction and engineering industries.
The services supplied by Novacoat include abrasive blasting,
painting, rubber lining and some site-based maintenance services.
"With the surge in demand in the resources sector in Australia
and the corresponding investment in infrastructure across West
Australia and around the country, Novacoat is ideally positioned to
capitalise on work that will result the significant investment in new
resource and infrastructure projects over the coming three to five
years," it says.
As for Virtualplus, this company has diversified its operations
to include, on a bulk scale, SMS and MMS solutions to and from GSM and
Wireless Mobile handsets using both its own technology platform, and
its interconnect agreements connecting it with over 550 wireless
operators around the world, including Europe, USA, Asia, and Australia.
"VPL has developed a strong brand with a significant customer
base in Asia and Europe, and the VPL transaction with MBX is supportive
of its desire to expand its operations in Australia and Asia as a
whole," Mbox says.
Mbox rejoins the trading lists today.
*****
Something must have twigged with BLACKMORES (BKL) investors on
Tuesday night, after the shares had risen 22c that day following the
news net profit had risen 26 per cent in the first quarter.
They came back for more shares with all the finesse of a hungry
rottweiler yesterday morning and boosted the stock $1.30 to a record
$14.85 at one stage.
"We are pleased to report that group sales for the three months
ended 30 September 2004 were $33.7 million, up 14 per cent on last
year.
"Group net profit after tax for this period was $4.6 million,
up 26 per cent on last year."
Nice, but not spectacular.
It got even less spectacular when the company said full-year
profit growth would be in the 20 per cent region - that is, less than
the first quarter.
Also, the first quarter reflects a lower level of marketing
investment compared with forecast spend levels in the remaining
quarters.
"In particular, much higher levels of marketing investment will
be incurred in the second and third quarters, reflecting launch costs
supporting new products and a concentration of media advertising
planned for these periods," the company said.
Based on a 20 per cent profit rise this year Blackmores is on a
future p/e of more than 20.
*****
Another come-back-for-more situation was EQUITY TRUSTEES (EQT)
after the proposed merger with the trustee company business of ANZ, to
create Australia's third-largest trustee company.
EQT will acquire 100 per cent of the shares of ANZ Executors &
Trustee Co and will issue to the bank 37.5 per cent of its capital and
pay $3 million cash.
EQT shares rose 89c in the first reaction on Tuesday and
followed it up with a further $1.01 to $9.50 yesterday.
The estimated revenue of the combined operation will be
approximately $30 million and the merged entity's private client
business will manage $2.5 billion.
EQT expects a saving of 10 per cent in operating costs.
"It is envisaged that the outcome for EQT shareholders - after
integration costs and once benefits start flowing from synergies
achieved - will be a higher earnings per share," the trustee says.
"Further, it is expected that EQT's increased financial
strength will enable improved dividends to be paid."
Ah, that explains the share rush.
Unfortunately, the stock now need a boost because the rush has
raised p/e to almost 21 and reduced yield to 3.2 per cent.
*****
Slowdown, what slowdown?
REALESTATE.COM (REA) had a record 1.2 million visitors to its
website in September.
The interesting thing is that of the 1.2 million, 1.07 million
were local and 123,474 were "international" readers.
That's just what Australia needs, international readers adding
to the rush.
"At a time when the market is reported to be tightening, we are
attracting record numbers of visitors," CEO Simon Baker said.
Realestate.com shares rose 4c to 94c.
*****
(Comments and complaints to [email protected] - no requests
for advice please.)
ENDS
Copyright © 2004 RWE Australian Business News. All rights reserved.
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Cheers,
Fig Jam
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