Forum Archive Index - November 2000

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

 

 

Hugh,

 

 

When I commented on the result early this morning, I did not refer to the $15 mill. redundancy payments made to the government during the year.

 

This payment arose as a consequence of the settlement of a major port strike in 1999. ( The union signed a new 3 year contract during this year; work attitudes have completely changed)

 

It is difficult to locate this item in the accounts. If it came from 'Operating activities', then the net profit could have been some $ 67 mill. and the - historic - P/E would have been about 22.2.

I shall let you know how this item was treated, was it tax deductable, and for how much longer this payment will be made.

Before long it will be transformed into profits!!

 

STOP PRESS:  LANG has taken over all Australian port-based assets and operations from Mayne Nickless.

This company has been looking for cash lately. I think that it was a very good deal for LAC.

 

I have discussed the dominance by LAC on the logistics to the port as well as on the operations on the docks.

This will make it more difficult for other companies to operate or own assets on the docks. 

It will therefore be cheaper for LAC to acquire assets at lower prices and increase their dominance at the same time.

Please remember that we are talking about Australia's high imports and exports!

 

This argument for reduced costs could also apply in takeovers of feeder routes when LANG has dominance. 

Please refer also to my contribution of Nov. 8, where pricing power is discussed.

 

Lang is benefitting from an increasing number of revenue streams.

It may still have some assets to sell as well; another avenue for raising cash!

 

Current LACO price: $3.15 (+ 15 cents), still well below my valuation of between $ 3.25 and $4.50! 

 

Lang is a tiger ready to pounce on compatible companies during the next few years!

 

Readers should note that the contents of this email are my opinion. This opinion may change; readers are not told to hold, buy or sell LAC securities and this includes LAC options (LACO). If readers elect to do so, then it will be at their own risk!  

 

 

Gerry

( LAC holder)