Forum Archive Index - November 2000

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Hugh,

 

1.Results are: Sales $ 583.4 mill. Operating profit (after tax and before abn.): $ 62.12 mill. (+ 70 %.). Net profit (after deduction of $4.354 mill. intangibles ): $ 57.76 mill.

 

Net operating cash flow: $ 111.3 mill.

Interest cost (incl. finance leases ): $18.2 mill.

 

Net debt:$116 mill. Intangibles:$100.3 mill. 

Current assets/current liabilities: 0.9

 

Basic E/S: 41.7cents.Current LAC price:$10.70.  

Current P/E: 25.7

 

Dividend to increase from 6 cents to 14 cents this year. Payable on Febr. 27. Annual meeting on Febr. 6, 2001.

 

2.Discussion. Please refer to my entries of Nov 7and Nov 8. They give a good background to LAC. Apart from restructuring ( including work practices), it has made several takeovers and these have taken LAC further into the logistics field.

 

They were designed to obtain the following critical objectives:

To provide 'seamless'  transport from place of origin to the docks and hence maintain control on costs and time.

To reduce competition and increase pricing power. It was prepared to move fast and incur some goodwill to achieve this.

 

However, the cashflow is considerable and this adequately services the cost of interest.

 

Operating profits' margin is a solid 10.6 %. This could decline somewhat as further takeovers of logistics, proceed.

And there will be plenty of targets to take over during the next few years!   

 

LAC will have no problems raising cash whenever it wants to, given the current shareprice!!

 

3.Outlook.

The company is creating an environment of rapid growth and this must lead to increasing LACO values. 

The price has risen from $1.20 to $3.00 (+150%) since Jan. this year.                                                                                         I valued LACO from $3.25 to $4.50 -Refer to entry of Nov. 8.

Now the result has been released it is possible that this valuation is somewhat conservative!

 

 

Gerry

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Disclaimer.Contents of this email are my opinion. This could change. Accuracy or completeness cannot be guaranteed. Any claims for damages arising from reading of,or communicating the contents of this email to others, will not be accepted. No one is asked to buy or sell shares in any company,trust or any other instrument. I hold LACO.