lol if the company going to sacrifice some growth for margin the pe would be more likely to re rate down as the market adjusts future growth to lower rates
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t_j’s mate Chelsea quoted in stuff yesterday
Chelsea Leadbetter, senior equity analyst at Forsyth Barr, said it was difficult to know the fulls ins and outs, "but having Geoff [Babidge] back is obviously a good thing".Analysts had struggled to understand some of the strategic comments coming out of the company.
Chelsea (and others) have not been doing their job properly
https://www.stuff.co.nz/business/118...-18month-reign
No wonder she looks smug, shareholders have been thoroughly "milked".
Repeat:
Jane joined on 16 July 2018 when ATM's sp was $10.75 - it is now $14.62, was $15.15 before the shock announcement.
That's 36% up or $2.92 billion increase in market capitalization since she took the helm.
Contrary to whatever others may think, I think she deserved every cent of what she was paid - it is less than 1% of the wealth created under her term.
Okay, lets go there mate. Here's how I see it. I know others will have a different point of view and that's fine.
Its an extremely volatile share so I think any analysis of the share price over her tenure should be based on a 90 day VWAP to smooth out the very volatile nature of the share price. For example in February 2018 it hit $14.70 in intra day trading so it all depends upon your frame of reference.
Looking at the chart for the last 2 years I would infer an approximate 90 day VWAP of about $12 before she was appointed and approximately a $14 90 day VWAP in her last 3 months.
If you smooth out the volatility it could easily be argued she added nothing as 14/12 = 16.7% gain in 18 months and in that period the NZX50 went up approx. 25%.
Any analysis of her performance whether its based on spot prices or VWAP must be measured in the context of the NZX50 as its clear with the substantial decline in interest rates in the last 2 years PE multiples have expanded.
I think she created nothing and simply built upon the momentum that was already clearly evident in the business under Geoffrey Babbage's excellent leadership.
It is abundantly clear and an undeniable historical fact that sales and eps growth slowed considerably (compared to previous rates of growth) under her tenure.
I argue she created no value under her term and any attempt to justify her remuneration based on a percentage of value created is spurious at best and conceptually fundamentally flawed without a comparison to NZX50 relative performance.
I'm going to leave it at that.
Which, Beagle, is fine.
What is highly objectionable is as W69 pointed out, some posters putting the boot in now after praising her strategy to high heavens previously - high growth strategy is ok with lower margins, look at the long term etc etc. Adds nothing to a proper assessment of the situation which warrants proper examination.
Not meaning you of course.
Increasing margins in the short term is easy - just cut back spending.
There's a big price to be paid in future though as many a company has found when they cut back spending on R&D, promotion and marketing, brand building and upgrading personnel.
Whirlpool comes to mind.
It's virtually inconceivable that the company could have continued growing at the previous breakneck speed when it has grown so large. Growth was always going to slow down, and I've been quite happy with progress over Jane's tenure. I sold down a few yesterday but A2 remains one of my largest holdings, I hope that this doesn't mean the company is going to reign in the aggressive expansion outlined recently.
Maybe the Board looked at the H120 forecast and said hells bells only 30% revenue growth on pcp and if we’re lucky 18% ebitda growth (compared to revenue growing 40% plus in last couple of years). That means in relative terms H1 is a shocker - worst for some time.
Jayne - your strategy not working that well - instos not happy - your words not turning into reality - time to go
Jeez H220 better be a boomer or else FY20 won’t be reflecting the intent of this ‘strategic growth’
Question - if the strategy they agreed to prosecute is only delivering 30% revenue growth and 20% ebitda growth isn’t something wrong.
I’m feeling like t_j’s mate Chelsea - rather confused