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Upcoming Announcement Fee Estimates and Analysis, page-149

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chris1983

13,667 Posts.

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27/02/16

17:05

Post #: 17133695
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Originally posted by db85 ↑

Most people on here are only looking at the first performance fee which is always going to be the highest because after a company floats it most likely is going to have quick jump, especially if it is in a major growth industry like BFC is.

Lets look at likely performance fees for 2H 2016 using a TSR of 5% and the ASX all ords average over 5 years of 2.7%. These numbers are for half yearly.

I'm using Jordan's number's of Market Cap $174M and performance fee of $14M which will be issued in shares, making the new Market Cap $188M.

$188M + TSR of 5% = $197.4M

$197.4 * 17.5% * (5% - 2.7%) = $1.68M

So your ongoing performance fee is more likely $1.7M compared to $14M, you can see why you have to look forward.

The problem with most people trading now is they've seen the 400% plus gains from BAL, A2M and BKL and they keep trying to find the next one, most the time losing money as they go.

I think BFC is a good growth company and if it can have a TSR of 10% and a good dividend why would you panic sell to try and make a quick dollar somewhere else.

I still think the performance fee is excessive but for the amount of growth BFC can have I'm more than willing to stay the mid to long term.

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I already mentioned this to the negative posters on this stock and from memory they did agree that if the company never again moved the stock upwards (SP wise) then they would never get a performance fee. They then started to mention the management fee.

BFC is a solid investment IMO and the company will have to generate SP gains over and over to reap large rewards which will work nicely for holders.

BFC Price at posting: 46.5¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

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