Forum Archive Index - May 2000

["G P Thompson" <gp.thompson@bitworks.co.nz>]

The current pessimism over FFS is over rated and will likely blow over for all the reasons listed by Les and others. Today's news  is nothing more than an attempt to negotiate in public. It may work.

Forestry companies need pulpers as much as pulpers need foresters.  They are basically each others profit margin. Someone has figured out a way to ramp FLB today.  The logical buyer for FFS is the Chinese.  So all we are seeing is negotiation via the media. Remember last year China suffered billions in flood damages because of de-afforestation. They can no longer afford to fell their own forests. Very much cheaper to buy Fletcher forests.

The recent drop in the NZD/USD exchange rate has just knocked 10% off the USD price and the share is only up to where it was in November 1999 no less. What material change has taken place since then to justify the decline to 53c in March? The C.E.O. departure is confirmation that a change of ownership and direction is imminent and is consistent with the press releases. The only uncertainty is the exact date of an announcement possibly later than most would desire but nevertheless this year.  Right now is great buying for all Fletcher stocks but be prepared to wait a few weeks. Hold off if you like but they may get dearer as crunch time draws nearer

For those who want the FFS balance sheet take yourself off to this link ...

http://www.fcl.co.nz/99_annual_report/interim_review/forest/f_position.htm  and calculate the debt ratio.

or the Fletcher site in general http://www.fcl.co.nz/home.asp  for trading reports etc.

 

Equity $1217M, Assets $2328M,  Liabilities $1111M  Debt ratio =1111/2328 =47%??

 

GPT