I’m surprised they still have Retire Australia
Was on the blocks a year or so ago
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I’m surprised they still have Retire Australia
Was on the blocks a year or so ago
At least I am not the only one confuzzled.
Infratil’s ‘bit of a beast’ result | BusinessDesk paywalled
Infratil today delivered what may prove to be the most confusing set of accounts in the current mini-earnings season...
you gotta wonder who this is all for eh shareholders?
Well, sort of wondering whether they jumped a bit too early onto the green bubble. Always safer to wait for the deflation first ;): Anyway - huge management incentives don't seem to make the books prettier - they clearly need for the future some more creative accountants.
Edit / amendment: should have read the presentation before commenting. I thought the Tilt deal does not go ahead, but apparently it is still in the wings. If it does, than they might well sell their green investment at the right time (which would not be the first time for them) - which would be good for shareholders :):
Crossing fingers ...
I was actually very impressed with the performance of Long Road Energy that they described during the earnings call - its been a very successful investment and their pipeline of projects is growing rapidly. its an excellent business model that particular business has, with so much hunger for Green Energy generation that many of the projects can be sold off (either fully or partly) to other entities at large premiums even before construction is finished.
I guess its fair to say that Infratil used to own infrastructure with a reliable income stream. Sure - they bought from time to time as well a dud (like some European airports, NZ bus), but overall they owned assets which just made money come rain or sunshine - and they still used to appreciate.
These days it feels more they gamble and ride on market hype. Sure - their assets are all rather essential and they do have a value, but that's often little earnings and plenty of market hype. Buy them early and try to flog them off before the bubble bursts. Admittedly - it often worked for Infratil, Z energy springs to mind - and if Tilt works out as well, than this will be in my view another master piece in speculation.
Good for shareholders as long as the gamble works out, but clearly - while management always benefits from the huge speculation gains, shareholders will need to carry as well the risk if things turn at some stage pear shaped. Imagine market paying for Tilt only something like a PE of 15 or 20 instead of the more than 40 it offers now. At the end they just resemble a bunch of windmills, which are easy to replicate and hard to scale. There is no guarantee that radiology, data centers, telecommunication, age care and renewables are all on a one way street to endless wealth ... in the long term they will not be more worth than a sensible multiple of their earnings potential.
I do see Infratil's current asset's at current market prices as a financial gamble - Sure - SP might go up driven by market sentiment, or it might crash down as soon as the market notices the low earnings potential of many of the assets. Earnings of the individual assets as well as of the company as a whole clearly need to improve instead of paying dividends out of share holders capital and even force share holders to pay taxes on the share holder capital they return (partially imputed dividends - lol).
Not really what conservative infrastructure investment is normally all about.
Personally I don’t mind complicated books on a business with an appreciating share price. From personal experience accountants are great a putting books together and terrible at running a business, other than their own.
I prefer to see those examples as astute investments, taking positions in companies, adding value and on-selling.Quote:
These days it feels more they gamble and ride on market hype. Sure - their assets are all rather essential and they do have a value, but that's often little earnings and plenty of market hype. Buy them early and try to flog them off before the bubble bursts. Admittedly - it often worked for Infratil, Z energy springs to mind - and if Tilt works out as well, than this will be in my view another master piece in speculation.
Disc: Holding since the IPO - no complaints!
nudging resistance at all time highs , only matter of time to charge on higher esp with billions in fire power available now thanks to tilt sale on potential purchases
just like I said: Profit upgrade following closing of pacific radiology transaction:
https://www.nzx.com/announcements/373139Quote:
On 19 May 2021, Infratil issued guidance for the year ended 31 March 2022 for Proportionate EBITDAF of between $470 million and $520 million (excluding Tilt Renewables and Pacific Radiology). Following completion of the Pacific Radiology acquisition, this has now been increased to between $505 million to $555 million, which includes a 10-month contribution from Pacific Radiology.
Cheers laserEye, you are on to it!
Just went to their meeting tonight in Napier.
Very interesting. Firstly they made it very clear that any money coming from the sale of Tilt would be put back into the business or a share buyback, rather than buying more new businesses outside their industry they are currently invested in. No mention of a special dividend. Historically they said it took a while before people saw the value in CDC and only recently have people seen the value. CDC is currently valued at its future pipeline value. So expects to grow its profit this year by roughly 15% and expects 40% there after when running at full capacity. It is 30% of Infratil’s portfolio and growing rapidly. So CDC might be a 5 billion dollar version of Tilt in a few years
There was a lot of talk about carbon emissions and that the cost currently around $37 per tonne at market value and that the new climate commission report was sent to the government today and results should be out within the next couple of days regarding how New Zealand would need to reduce carbon emissions by 2050 to zero and that the new cost will be higher. They mentioned that the market should try to fix this and not the government by introducing no new legislation. ie the quitting of gas exploration in Taranaki resulting in Huntley power station which uses coal to power for the people. Or something similar to that. Also it was mentioned by Tim Cook that we should have finite carbon credits rather than infinite. I believe Tim Cook is involved with the climate commission.
Vodafone is currently doing really well and is in the process to simplify stuff for the end user and it will help their customer service team Greatly. They say they still have a way to go, but that they are on the right path.
The new acquisition is good with roughly 20% share in New Zealand and not really having a presence in Auckland yet so room for expansion. They expect all areas of this to expand as rehabilitation will be very important for organisations like ACC and people alike with the people over 65 to grow by 25% in the next few years.
Retire Australia had a few obstacles with covid but seems back on track with some growth in the pipeline.
Wellington airport is running at 90% of pre covid. They repaired the runway one year early, and saved 2 million from being able to do it quicker due to fewer/no flights.
Long road I feel will become a Tilt story and I feel that is where they will put the majority of funds (was not mentioned and just my personal opinion). Joe Biden has said he wants America fully green by some unimaginable date, I can’t remember when, but they want to spend $100 billion per year to make it so. Long road is currently valued around $130 million, but that is valued without future pipeline included in that valuation unlike Tilt. They believe they would get a heck of a lot more for long road now than that when including their pipeline. Let alone in 5 years time when they will be expanding rapidly with (expected) multiple contracts. They might sell that for 2 billion US in 5 years time who knows.
Anyway there was more, but those were the points I took from this meeting. Loads to digest. Great canopies as well.
Thanks Ggcc, great summary & much appreciated.
+
18.8 % compounding return since listed 1994?
20 % over last 10 years
An initial investment of $100 now worth over $10,000
$45m? in cost savings in Vodafone in last year, simplified the business by eliminating 1500 different offerings
Retire Aus building Care suites, sales of units very high but need to build ahead more
Galileo built a good team up from 1 to 25 ? and ready to implement
If any share price weakness likely to introduce a share buyback that will underpin SP