Food is never far from the front of my mind
Quote:
Originally Posted by
Snoopy
....This shows that if you remove the capital structure costs away and compare the underlying earning capacity of the vehicle finance business, Dorchester is approximately twice as good as generating EBIT returns as TUA is!...
The figure you calculate for TUA is basically net profit before tax, but after everything else (interest, admin overheads, tea & biscuits, etc) as been accounted for.
The figure for DPC is before interest, tea & biscuits etc (look at the Corporate & Other column to see how much is consumed). [Update: actually looks like biccies are included but interest is not, maybe, it is hard to tell].
So you are not actually comparing tim-tams with anzacs.
Best Wishes
Paper Tiger
The DPC, TUA Cross Shareholding Relationship
As at 30th September 2013, Dorchester owned 5,432,088 shares in Turner's Auctions. In the 30th September 2013 DPC half year accounts , among the assets listed is an 'equity accounted investment' valued at $9.679m. This represents the shares held in Turners Auctions by DPC. Do the division and you will see those shares are valued on the books at:
$9.679m / 5.432m = $1.78 per share.
The majority of this stake was acquired from Milford Asset Management at $1.82. Since that time Dorchester have acquired more shares on market, which is why the average book price is now lower.
There are 493,971,377 Dorchester Pacific shares now on issue. If the TUA share price were to increase by 45c this would create an additional.
5.432m x 0.45 = $2.444m in wealth for DPC shareholders.
Spread over the number of DPC shares on issue, this will increase net DPC asset backing by:
$2.444m / 493.971m = 0.5cps
Of course this has already happened, because with TUA last trading at $2.40, the increase in share price has been book value has been 62cps. This means NTA of DPC has increased by 0.7cps since the 30th September balance date.
None of this is really enough to affect the fortunes of DPC going forwards IMO, even if it is nice to have a bit more 'capital in the bank' than you think.
SNOOPY