I agree with you here, Nita.
Have been watching DPC for the last 6 months or so. Was tempted to purchase just prior to the last dividend on the basis of HG's support for DPC by way of the loan.
Still watching and waiting...
Director Paul Byrnes-has been buying over last couple of months,
Yep Doc
I think VIK are doing a bit self A/Kicking. They bad mouthed DPC which i thought at the time was a very very silly thing to do. Maybe it was a personality thing. Some one bought 20K at 84c right after me. was that u.
BB
Defintately has the potential as one of the "turn-a-round stories. It always had more stability than most other finance co's.
Big risk and big rewards are on offer no question. What i would want to know from dpc is how much private funds have been taken out of dpc since the subprime issue surfaced? The value of loan defaulters? what is REALLY their bad debt status (write offs) and not just what is written in the books.
Remember, they said that $20m was for expansion. Well, we have about 3 months maximum to find out. The signs are there for all to see of the REAL POSITION of DPC.
Is this going to be a turn-a-round story? Quite possibly... time will tell. just not my time to dip my toes in
Nita
Let us know the answers coz they are good questions.
BB
I see good doctor that occasionally the young lad can get one over grandad. Your 6 mill "profit" forecast is now 3 to 4 million!! due to less loan fees from less loans & bad debts - didn't take long to be downgraded -
Also is that Hugh I see getting his "loan" back in the announcement below? Sort of the opposite to insiders buying more?
Qn: why did he loan in the first place.
An: because DPC is draining cash - reduced fee income - quality assets like direct broking sold (they could have cleaned up under kiwisaver) - bad debts increasing - fixed costs remain.
DPC
29/02/2008
FORECAST
REL: 1700 HRS Dorchester Pacific Limited
FORECAST: DPC: Revised Profit Guidance
Dorchester Pacific Limited has today revised its profit guidance for the 2008
financial year to between $3 million and $4 million net profit after tax
(previously $6 million). This is a result of reduced lending volumes, a
consequent reduction in loan fee income and increased provisioning in
Dorchester Finance.
Dorchester Finance currently holds $33 million in cash or cash equivalents,
representing a healthy 12% of Dorchester Finance's total assets. This
position is after repaying a $20 million loan to related parties of our two
major shareholders.
Also since they made 3.1m profit (including gain on sale of the property) in the first half - this means they expect between 0 & 900K profit in the second half. Not going to be a big divie on 900K! & if it is then they are borrowing to fund it which would be even worse.
I am a little bit surprised. To me it doesnt make sense for HG to get is loan money back unless he has serious concerns about the cash flow of DPC. I read the intial announcement that the load was for a specified term but gave HG the right to withdraw at any time. If DPC do not have a cash flow problem then the only other possible conclusion is they need the money for another investment.
Still warning bells if you ask me