My biggest concern is whether or not FALL IN MARGIN AND REVENUE is consumer driven.
SOLD
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OK….got it. The words are confusing. But the formula is crystal clear. IF they had said "less" or "minus" instead of "excluding" would have helped. Sorry. Science Grad.
"NTA (net tangible assets) is described as the total assets of a company, excluding intangible assets (such as goodwill, trademarks and patents) minus total liabilities. The NTA/share value is used to determine, in theory, the money that each shareholder would receive if the company was forced into liquidation and all of the assets were sold at that point in time.
Formula: NTA = total assets - total liabilities - intangible assets"
Intangibles must create havoc for the auditors over the years. How do you value them ? How fast and much do they depreciate ?
Appreciate you pointing me in the right direction.
Cheers
RTM
RTM ...good you are interested
Intangibles are ‘valued’ at the time a acquisition is made - essentially the difference between the acquisition price and the tangible assets (real things).
Things like goodwill aren’t amortised (the word they use for depreciation when it comes to intangibles) but there are some intangibles that have a finite life that are amortised (just like depreciating a piece of plant)
The value of the intangibles is tested each year to see whether it is still worth that amount - they generally let the accountants do discounted cash flow models assuming future growth rates and all that sort of stuff. If the SUMs say that the value of any intangible asset is at least what it is recorded as in the accounts all OK ....but if that value can’t be justified they need to reduce the value of that asset. That’s called an impairment ......and affects profit.
You are familiar with Ebos so have a read throughnof Pages 46 to 51 of the Annual Report
http://nzx-prod-s7fsd7f98s.s3-websit...615/285091.pdf
If you read it reasonably thoroughly without getting bogged down in the detail you’ll get a pretty good feel for what’s going on. There are a few paragraphs in plain English
Weekend homework
Thanks Winner for your break down of the jargon. You have explained it well.I really do appreciate the time you took to go through this ,seriously.
I have always treated goodwill EXTREMELY suspiciously , for example, I take the boys (employees)out on the town..... I dont expense it , rather I call it "goodwill".
this way I have not hurt this years company's taxable profit because the beer doesn't come off the annual profit, rather it is treated as an asset, ie improved the intangible " brand"(obviously everyone is happier and will stay on another year-staff retention) . Therefore an asset to the company and the company is now worth more on paper.
... it improves the ( intangeble)asset brand of the company making it more valuable as a brand and this years profit is all but unaffected. ........ current management look good as the profit is high and the company looks asset rich...... drink on I say, everyone wins.
Personally I Look for the real cash, ie ... dividends. That's proof there is actual money in the pot.
but again. Winner , I do appreciate your responses, just have strong feelings about goodwill and the trap it can set for the unwary.
Disclaimer. Have done zero homework on EBOS , so am unfit to comment on their result. Just too busy loving the retirement villages (sum/oca/arv)... now there are some serious assets.
that was a simplistic example a pretty smart friend explained to me once. Big companies seem no different. In fact they might be worse.Dick smith, Tegel,Moa etc ......
I will exercise goodwill to those who mis-understand goodwill and let the matter drop.
Meanwhile despite the lack of revenue increase this year
and the below average EPS increase
and the fact that I (always) regard it as currently overpriced,
I have pulled up a long term chart, omm-ed a little, let peace and serenity enfold me and decided not to sell any.
Instead I will watch it joust with HLG for the #2 position in the portfolio.
Next year they start reporting in AU$.
Dividends are 100% (AU) franked but not 100% (NZ) imputed and I have realised that if I could persuade the registry that I was an Australian non-tax resident instead of a New Zealand non-tax resident (just for EBO mind) then I would end up with more money from the dividend/shares from the DRP
I apologise Snow Leopard. You are totally correct , I have wrongly lumped the two two terms " intangible asset" and" good will " together in my head as one.I do see them both as similar fuzzy accounting tools that can manipulate the books and am wary of them both. Cheers for your patience. matter dropped.
Thanks all, much clearer now. Beaut day, chugging back to marina after having new antifoul applied. Need next months dividends!
Good on you RTM
Plenty of good boating / sailing up eh
I see EBO making an acquisition some time in next financial year to get the Revenue up, the fact their their own brands are doing well is a good sign they will look at further acquisition IMO. Have made mistake selling previously and will just hold this one. Decent divies as well based on my initial purchase prices.
Lucky I had been doing some homework. From the Sky report.
"The net loss includes an impairment charge of $360 million. The SKY board is required to assess the fair value of intangible assets at each reporting period and if this is determined to be less than the book value, then the assets are impaired. The impairment charge reduces the net book value of SKY’s equity at 30 June 2018 to $1.03 billion ($2.64/share) compared to $1.33 billion ($3.41/share) at 30 June 2017. SKY shares closed at $2.60 per share on 30 June 2018. This goodwill asset arose on the merger of Independent Newspapers Ltd (“INL”) and SKY back in June 2005 and reflected the difference between the fair value of SKY’s assets at the date of the merger and the price that INL shareholders agreed to exchange their shares in INL for SKY shares. This is a non-cash charge that has no impact on SKY’s 2018 cash flows or on any of its bank covenants. "
And SEEKA...
"Profits for the six months were impacted by a $1.53m write down of goodwill in the tropical business, Seeka Glassfields. "
Lots of homework for the weekend !
Im seeing the increase in margin as a good substitute for current revenue growth, as we know that revenue is going to increase by $1B over the next year or so. True it is likely that this recent large deal with ChemMart will compress margins but I guess its harder and hard to do both at the same time as the company grows.
They have a plan though and continue to execute. Its totally clear these guys aren't just sitting around praying. I'm still holding. share price hasn't retraced much from recent surge so I'd guess 21.60 might be a short term target for traders , though I wont sell.
I'll try not to do a hat trick but will comment that today is an all-time closing high. Yesterday spiked higher but didn't hold.
Will the gap be filled ? If so price would revert to $19.25 , surely a bargain such as that could never present itself.
Attachment 9877
Still going up, still setting new highs, good volume behind it too.
When will this madness end?
the longer the consolidation (the 2 year triangle) the more powerful the breakout
Attachment 9919
some were traded at 23.00 (up 50ish) on Friday afternoon, and not many sellers below that level today. further gains possible!
okay the end of today brought a completely different picture and I succumbed to divesting 20% of my Ebos.
Firstly it was too big a percentage of the portfolio (and still is actually) and secondly the price had spiked on Friday (with large volume) and reversed giving it a topping look with that hammer candle , and now today its done a bearish engulfing candle.
I guess I'm also influenced by the price of SML too, and so creating some clear liquidity preparing for a double down on that one at a certain level.
Attachment 9983
Hopefully not too fickle but this is what I saw today.
I see Ebos as one you hold as you never know when the next leap is going to happen. It can stay dormant on a level pegging with very little movement of the share price for long periods of time until BAM it leaps up another 10-20%. Who knows when the next jump up will occur.
I've only gone down to 80% of my earlier holding which constituted 40% of my portfolio so in essence I dont disagree but after such a huge rise there is very like to be retracement and an opportunity to rebuy at a lower price. If that never happens well I am still very exposed to the price staying high or higher with it now being 32% of the equities.
Down 33c today so it could keep falling after such a strong rise in the last six months.
I am still surprised that it is trading above $20 to be honest.
So the fact that $22 has held since entering ultra blue sky territory and that you can draw a little trend line (log chart of course) for the last two months action makes for one happy Snow Leopard:
http://bioweb.uwlax.edu/bio203/s2008...appy%20guy.png
Does this go ex divi on 27th or 28th? NZX says yesterday 27th but the annual report says 28th...
It went Ex Dividend yesterday, Thursday 27-Sep.
The report says the Record Date is the 28-Sep.
The Ex Dividend date and the Record date are two different things and one market open day apart on the NZX
EBOS might be buying Device Technologies in Oz. A A$700m company
https://www.theaustralian.com.au/bus...c8a90f73df6323
Another question — do punters reckon the benefits from that new billion dollar contract that starts soon is built into the current shareprice
AGM Presentation & Speeches are available.
For some unknown reason this stirring little piece of oratory:
"On the basis of our current trading performance, we expect the Group to generate underlying earnings growth in FY19 with further growth forecast into FY20 as we commence servicing the Chemist warehouse volumes."
has failed to light a rocket under the share price.
Bought a few at 21 . I never sell these
Interesting to see this at so much variance to the general market today and up 23c and over 1%. Im sure you all know what a signal this amounts to when there is no associated news.
A few days ago I replaced at 2055 half of what I sold at 2269. So now Ebos is 22% of my equities. An overweighting I am comfortable with.
When I think about it that hammer candle that I identified on this stock in late September was a precursor to all this October shenannigans.
Even more interesting, to me at least, is that the price after having touched the rising green-yellow zone boundary line a few days ago has remained in the green since despite all the market shenanigans.
When a stock respects the zone boundary line (akin to a smart trend line) one can be lead into believing that this is other than random chance and all those hours of programming and data processing have not been in vain.
Hopefully EBO will continue to follow the rule book as defined by my software and that $100 a share is still on.
:t_up:
Coincidently I am currently engaged on a major bout of Data Integrity, Conformity & Continuity investigation for my prime customer and it is a real eye-opener.
:scared:
TTFN
It was reported in AFR that EBO had lost interest in a takeover in AU . I think investors were scared they would pay to much for it . This is a well run co.Is about 18 % of my portfolio and I keep adding . Seems to me have formed a bottom at about $21 but out of cash.
Whatever the reason, EBO strong again today, up 53c on light turnover. Perhaps the secret is to "lose interest" in takeovers.
:cool:
Disc: Holding, firmly!
EBO results look just as good re-cast in AUD.
http://news.iguana2.com/macquaries/NZSE/EBO/329852
Just threw this in to make a change from reading about retirement company stocks!
;)
been watching this one - result weaker than first half 18
yeh I was a bit underwhelmed and not sad to only have 60% of my usual holding at this point. Will look to get back to normal at lower prices if and when prices go lower.
not really a critical point this result though, the platform remains set for growth in the future.
Yes, a bit disappointing but the possibility of a knock from the Aust govt's review of the Pharmaceutical Benefits Scheme was always present - and will probably continue to be there for the foreseeable future. The downside of growth by acquisition of Australian pharma businesses.
Unspectacular result.
Ebo are a funny a though; they wait until you lose interest then they buy something and the price goes up.
Bottom draw for safe, moderate growth as part of a div portfolio.
Couldnt agree more . Buy when they dip.
p.s.
Good to see the Pet side of things doing ok esp the food sales.
First-half Black Hawksales increased 23% with strong growth achieved across both Australia and New Zealand.
We dont use Black Hawk for whatever reason and I was wondering how this was going. New brand can be hard to work.
Haven't even seen the pet stuff in the supermarkets, so i think there's some problem there... unless they're targeting vet shops
Supermarkets not always your best customer if you want a decent profit margin .....
Animates, vets and online suppliers like pet.co.nz
Holistically priced so bloody expensive. Some people send a fortune on their pets so the price don’t worry them. Apparently its feed to a lot of working dogs
High margin product for Ebos
We feed ours on a similar Australian product but at 50% of the price ....they don’t mind.
This Coprice stuff - $69 for 20kg at Animates
https://www.animates.co.nz/coprice-f...food-20kg.html
Can post that here as Ebos have an interest in Animates I believe
Dogs love it
Craigs are expecting a flat year,however 20% growth next year.
Their target price is $24.11.
I was referring to black hawk, but this has been answered. Nn all
Interim report out today is pretty flat
The words indicated a growth in profit but eps is actually down so some confucscation in the report. That good old underlying is up, but actual is actually down a little
But seemingly at the moment flat is the new growth huh.
No doubt weighted to second half, and next years gonna be a ripper ;+) (This sentence specially for W69 )
Yes and no. EBO now has a bigger Aust business than a NZ one, admittedly much of it is low margin, regulated pharma-type. Note, however, that the Aussie dividend is fully franked whereas for NZ shareholders it is only part-imputed. Speaking of which, the record date is/was 15 March so don't think of buying for the div!
Disc: Still holding.
https://www.nzx.com/announcements/332489
35000 Ebos shares will buy a very nice deck. But with half a million or more left still quite a lot of skin in the game, so nothing to see here.....
Agreed.Sale was worth approx $735,000
Yet when a TRA director sold approx $70,000 worth of TRA shares, the natives on TRA thread went right off their heads.
Different threads,different types of investors?
Dang, timing is a funny old thing. Had a buy order in at 2100 for a while but seeing it get to 2200 I pulled the plug on it this morning. Bugger me 1.8m shares go through pre-open at $21.00.
For the top end of town and those who are well connected some cheap shares
http://nzx-prod-s7fsd7f98s.s3-websit...779/298957.pdf
So, a $150m raise. GXH market cap currently $157m(ish). Hmmm, so throw a couple of extra bucks in and they could maybe have a crack at it? Good timing too (5-year lows). Could be why there has been a bit more life in GXH recently? Just a guess though.
We have been offered some.Not enough in it for us and we have enough. Will be around 4.5% dilution .
Also the cheapest way.
I held EBO for over 25 years.No longer hold.
The PE ratio used to vary between 13 and 15.
The growth rate was between 12% and 20%.
Today the PE is 22.45 ,while the growth rate appears to be between 6% and 12%.
The current gross yield is a very modest 3.27%.
Cheaper for who?
8% of 150m is 12m, then there is the placement and underwriting fees. An accelerated renouncable pro-rata rights issue would cost less than that and have no need for underwriting. That is best practice and a company should justify why they use any other way to raise capital.
Remember the damage done to the TRA share price after they pulled the same rubbish and they had a SPP, something EBOS isn't even bothering with. Diluting shareholders to the benefit of the big end of town totally destroys shareholder goodwill. This from a company I held in high regard until now.
No wonder the NZX is falling apart if this is how companies treat their own shareholders.
You can't call the 8% below market value a cost to the company. A cash issue would have to be pitched at about the same level in order for shareholders to take up the offer. There would be more costs dealing with thousands of shareholders than what this is costing them.
I agree though that in fairness to shareholders that a cash issue is the preferred method .
This is a moderately negative thing as far as I'm concerned. EBO have been good to smaller share holders over the years but this has burnt goodwill as far as I'm concerned. I've got 60k + shares so will look to start maybe taking some money off the table in case this is the start of a new pattern of disregard for shareholders. Today I took the small step of cancelling my DRIP participation. I may write to the company tomorrow and make it known that IMO a rights issue would have been fairer even if not a cheaper way to raise equity.
Disagree, any "loss" or "gain" from a pro-rata rights issue is born by shareholders in the same proportion as they own the company so it is not "lost". A placement guarantees most shareholders own a smaller relative % of the company.
They are also cheaper, because if the discount is big enough (~20%), there is no need for an underwriter which costs the big $$.
To maximise shareholder goodwill, sell any unclaimed rights to the highest bidder and return the money made back to those shareholders. So there is not a penalty for being on holiday or being financially unsavvy. This is how you grow your shareholder base and the market as a whole. Treat people as you yourself would want to be treated.
I bought EBO in 2010, with a few more added in 2013. Shareprice up over 200% in that time which is not too bad considering there has also been a reasonable dividend. Looking back to 2010, at the same time I also bought Delegats. Lower dividend but they are up over 500% in the same time and currently have a lower PE and have an unchanging and excellent strategy they always deliver on. I like EBO and a bit reluctant to sell, I think they are in a space (spaces) that has tailwinds going forward but I think their delivery is patchy, their strategy a bit incoherent, the shares are overpriced and the managers just shafted the shareholders.
Can't remember whether it was 1991 or 1992 when I first brought into EBO.Think their market cap was under $3mil.[not a mistake]
Not long after I brought in a broker suggested I sell, as he knew they were going to loose Clark's hip and joint agency.!!!!!!Luckily there was no sharetrader in those days!!!.lol.
Had a fantastic run with them.Was extremely difficult selling down a few,then a few more until such time I sold out completely.
A wonderful company with great stock turns and strong cash flows.
If you dilute some shareholders to get money to spend on growth, those shareholders not participating in the raise end up with a smaller percentage of a larger company.
If the money raised isn't too discounted, and the money spent on growth is well placed, diluted shareholders can end up better off... or vice versa. It can be bad, good or neutral.
So...
We know the raise is slightly discounted (as it has to be too get interest). The allocation wasn't fair in opportunity, but did keep the cost of the raise down, which is the important thing. So, I conclude that the money raised wasn't too discounted.
The question is, will the money spent be earnings accretive... enough to make the raise in the interests of all shareholders?
Personally, I suspect it will only be slightly bad, though we can only speculate. Certainly it shouldn't be too bad, though i think the market will overreact.
I was a bit miffed at the institutional placement excluding retail shareholders. How did you get offered some JT?
However I have every confidence that the money will be well spend so will just let it go.
The significant shareholder notice today from FMR (Japan) is a bit weird.
They would appear to be telling us today that they increased their shareholding more than one percent from transactions dated early 2018. This strikes me a somewhat delayed ??
Other than that buy on dips - not that there have been many lately!
Peat ...all those buy and sells FMR made from 2014 not once did they increase their holding by that 1% needed to make a disclosure ...until the other day
Peat , Craigs rang us and offered us the opportunity. We are not big big $ clients of theirs either so down the pecking order somewhat..
EBO Directors and Management should hold their heads in shame
http://www.sharechat.co.nz/article/0...shame-nzsahtml
this watering down thing has kicked in right ?