people opinions, page-2

Sorry can not help with NBL but you may like to look at this stock R/R speaks well of it

Good trading


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REBEL SPORT LIMITED



REB today came out it with its very satisfactory annual result. It is now (by virtue of its association with Harvey Norman) changing its balance date to June from March and so interestingly enough, we will see a result for 15 months when that result comes out.
It announced a record profit and rose 8c on the announcement to close at $2.03. The announced profit before tax was $8.77m, the previous year being $1.99m. The after tax and outside equity interests result was $6.62m, a $6.41m increase on the virtually nil result last time. The result is equivalent to 10.51c per share, which means that the company is now trading at a little under 20 times earnings.
I would like to remind subscribers that the Harvey Norman group was not behind this company for the full 12 months and that clearly, the benefits that have been brought by the association with HVN are going to grow and grow. During the period, the company announced that the number of stores has increased to 47, and they opened 5 new super stores at Auburn and Hornsby in Sydney, Morely in Perth, Wyalla in South Australia and Darwin in the Northern Territory. The company did not declare a final dividend but that is not surprising - I did not expect them to, as they have just raised some $15m in a rights issue to provide further working capital for expansion. Our benefits will have to come from profit growth and therefore, share price increase.
My upside forecast for the next year is up another 25% and I would not be surprised if the 25% growth is continued into the following year, which would mean about $8.25m profit next year and $10.35m the year after that (2004).
The number of shares on issue after the last rights issue is 74.157m, which gives a market capitalisation of just under $150m. On the stores that the company currently has, I am forecasting that in the June 2004 year, REB will be somewhere around 14-14.5 times earnings. Given that I know that Gerry Harvey himself believes that this company has a high growth trajectory, I would think that the current price is certainly not too high. The last recommended buy limit was $1.90. I am now raising my buy limit to about $2. I believe REB's performance more than justifies this market rating.
It seems to me that REB is on a potentially huge growth path, with Gerry Harvey guiding it. That to me is a pretty potent combination. The company's revenues rose to $251m, which means that it sells $5m of goods per week from its 47 stores and must now be regarded as a substantial retailer. The market capitalisation is around $150m and I believe it won't be long before some institutions start looking at possibly buying in. As the stock is tightly held, it ought to cause a substantial rise if they do start to accumulate.
If I sound bullish, it's because I am. I would like to point out that I do have a vested interest in the stock, in so far as Rivkin Financial Services holds a very large position (the second largest) in REB, and I am the single largest shareholder in RFS. So all in all, it is good for RFS and its shareholders, as well as REB shareholders.