Forum Archive Index - May 2000

["nick" <acummin@es.co.nz>]

...Can you please run this
> over ADV as there seems to be some confusion over PE...maybe you could do
> some stats on AIA too
> cheers
> Lazy Warner Lamber
>
       Advantage should be amusing, lets take a look
1)
1999  1998  1997  1996  1995
8.5       -40      4.8   10      12.2

   Earnings per share are all over the place and fail on
 this fact alone,   clearly the company expects better in
future but its track record of earning for shareholders is not good

2)  P/E IS 26  and we have to guess on growth, which sums up the
    speculative nature of this company. Lets say earnings per share
will increase by 15% per year

                       26
                 --------
                        15       PEG     = 1.7 which would make it expensive
                                   share price would need to drop to about
1.80
                                    to give value at 15% growth but remember
its all
                                       guesswork

3)  Chairman is no doubt full of hype about the future of this outfit

4) Fails on cashflow etc, these new e-companys are chewing up money
     at a fast rate and have yet to prove they can provide real returns in
the
     form of earnings to shareholders

5) They have no real competitive advantage, they were in fairly early but
competition is growing by the day. It is clear many of these type of
vcompanies
   will be swept aside in the long run. However huge rewards for the
winners.
         To sum up advantage has to be seen as speculative and still like'
     many e companies seems rather expensive despite its recent drop in
price

  The company originated in 1980 as a distributor of electronic cash
registers and weighing equipment. The shares were listed in August 1993
following a public offer of sale of 5.75m ordinary shares at 90c. Following
a period of rapid restructuring and refocusing, the company is now a leading
supplier of e-commerce and transaction processing solutions in New Zealand,
Australia and other Southern Hemisphere countries. It has three business
units: business-to-business e-commerce, retail solutions and point-of-sale
equipment. It provides web development capabilities, software development,
transaction processing and funds transfer capabilities, with e-commerce now
representing more than 60% of revenues. Recent performance has been enhanced
by developments within the e-commerce interests including upgrade business
arising from demand for Y2K compliant equipment. Mainstream interests have
been significantly enlarged by several acquisitions since mid 1999 - a $9m
controlling stake (recently raised to 80%) in Computer Enhancements (now
Advantage Portable Technologies), a major supplier of wireless and bar
code-driven data management solutions; PEC Retail Solutions ($15m),
providers of end-to-end solutions to three of the world's major oil
companies - Shell, Caltex, and BP in New Zealand, Australia, South America,
South Africa and South East Asia; Glazier Systems ($7.1m), Internet
developers and service providers; Webmasters ($8m), Internet development
company, and software development company Aldridge Punter ($6.3m). The
company also acquired a 20% stake in the restructured Internet investment
company Strathmore Group in September 1999 and joined with Pacific Retail
Group to create New Zealand's first Internet Supersite (FlyingPig.co.nz).
Further large scale Asia Pacific investment opportunities are being targeted
short term in a vigorous drive for regional presence, market and revenue
growth. First half 1999-2000 results reflected the group's recent focus on
business-to-business e-commerce with additional gains derived from unusual
items ($982,000 after tax) including investment realisations. The group's
move into e-commerce has been rapid and successful and the investment
performance has been excellent in the past year - attracting the attention
and support of significant institutional investors including George Soros'
Quantum Emerging Growth Fund






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