Around the Traps ... with THE FERRET 08:29, Friday, 3 August 2007
Sydney - Friday - August 3: (RWE Australian Business News) - ***************************
HYDROMET (ASX:HMC) said yesterday that activities for the financial year 2007 had been "extremely rewarding", with significant contributions from the established and expanded selenium/precious metals project at Newcastle and the recently commenced used lead acid battery (ULAB) recycling project at Unanderra, NSW.
"Extremely rewarding"?
We rushed to see the details.
It was a profit of ... $2.2 million, and that was before tax.
The market thought it OK, though, and pushed Hydromet up 2.3c to 10c before closing at 9c on turnover of 6.7 million shares, 10 times recent levels.
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Four more companies greeted the judge yesterday and the biggest and most "serious" of them was the also the biggest dog for investors.
HEDLEY LEISURE AND GAMING PROPERTY FUND (ASX:HLG) listed 109 million stapled securities after a well-rushed IPO at $3.50.
The securities opened at $3.44, struggled to touch a high of $3.45 and then fell away to close at $3.30.
Investors can take some comfort from the fact that Australian Leisure, a similar entity, also had a less-than-stellar start after a controversial spinoff by Foster's.
It was subsequently acquired by a Woolworths consortium after a takeover battle.
Also, the IPO forecast a yield of 7.75 per cent in 2008 - 90 per cent tax deferred - and 8 per cent in 2009.
The yield at latest discounted prices must be up to about 8.4 per cent for 2008.
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It's always a bit risky being a smartarse.
Early this week Ferret took a potshot (good-naturedly, of course) at a company which had written "properties" when it meant "property's".
Except that someone then chided your scribe for having written, later in the same column, "pruchase" when he meant "purchase" (hey, a typo is not the same thing, OK?).
Anyway, in yesterday's column Ferret had a go at a company for giving the "tautologies a hiding".
The column said the company had announced the signing of its "second supply contract with a significant rare earths customer for the supply of rare earths.
"The contract is a long-term, five-year contract worth more than $US200 million over five years."
Now a reader has pointed out these are not tautologies, but repetitions.
According to the Compact Oxford English Dictionary, tautology means "the saying of the same thing over again in different words, considered as a fault of style".
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Talking about typos ... there was a typo in RIO TINTO's (ASX:RIO) half-year financial report (on page 19 of 31 in the PDF) ... net earnings was written as $US3,523 million while every other mention in the PDF (including page 1) had the figure at $US3,253 million.
Rio was quickly onto the case and issued a crystal clear, three-paragraph correction two hours later.
What a nightmare it would have been if it had simply reissued its XX-page tome and said it was a "corrected version", without saying what the actual correction was.
Hard to believe, but a lot of companies do that.
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Sellers dumped OPTISCAN (ASX:OIL) down 10c to 40c and closed it at 41c after the company said its largest customer, Pentax, had advised sales had not reached expected levels.
Although it had excess inventory of ISC-1000 control boxes, it would continue to place orders for miniaturised confocal scanners.
But was that a dressing down Optiscan gave Pentax?
CEO Matthew Barnett said, "While we are obviously very disappointed to have received this advice from Pentax, we view it as a part of the process of establishing and growing endo-microscope sales.
"It does, however, underscore an inherent lack of visibility into market demand, which we are finding increasingly frustrating.
"We are active on the ground in key markets, and see high interest and demand for confocal systems, especially in Europe.
"This is not always evident in the data flowing through to orders and forecasts from Pentax."
Optiscan has demanded a senior-level meeting with the CEO and president of Pentax to discuss the ongoing and forward sales rates and this has been confirmed for late in the month.
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GBST (ASX:GBT), which stands for Global Banking and Securities Transactions, and is "Australia's leading provider of securities transaction technology", lifted net profit 31 per cent to $8 million in the year to June 30 and the shares shot up 19c to $4.17.
EPS rose to 18c so the closing price is a not-cheap 23 times earnings.
However, CEO and managing director Stephen Lake said: "The company's strong increase in earnings demonstrates the potential of our business.
"We have provided unaudited results to inform the market, as we have accelerated the expansion and diversification of our services with the acquisition of wealth management software group InfoComp.
"This acquisition will become effective on or about 1 September, and is projected to be earnings per share positive before amortisation of intangibles in FY2008."
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DOWNER EDI (ASX:DOW) shareholders hate August.
In August last year the company's expected $125 million profit became a $25 million loss after writedowns.
The shares plunged from $7.41 to as low as $4.91 in one day.
The stock slowly recouped the losses and continued to climb, to as high as $7.78 in April.
The stock had drifted back down again in the general shakeout, to $7.01 on Tuesday, when it called a trading halt.
Yesterday Downer said full-year results would be $101.5 million, "which is significantly lower than its previous guidance of $157-$160 million".
Downer shares fell $1.39 to as low as $5.62 and closed at $5.85.
(20min delay)