Forum Archive Index - May 2001

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

 

Mat,

 

1. I am pleased that you had a look at the Receivables market, a sector, where investment in a carefully selected company can be rewarding.

 

I hold BCH and CLH shares. I have been a shareholder of BCH since their reconstruction in 1993 / 94 and have done well.

 

I have also commented on CLH from time to time and it is one of a number of recommended Australian shares. Refer to: " Work ... Investment results ( 5 ), of April 3, 2001.

 

This stock, quoted @ $ 1.73 on 18 Nov. has risen to $ 4.80 a rise of 177% over 6 months ( up 30 cents today ). 

 

2. Against this background, I want to reply to your post " No subject, Mat T." I take it that when you quote " Clearing House ", you are referring to Collection House or CLH : < www.collectionhouse.com.au > ? 

 

As to your suggestion " that RMG could be taken over by one of the established players", I can only reply that, in my opinion, it won't be BCH or CLH.

 

These 2 companies have the cash, the computer software and the highly skilled staff to operate at at the highest level where the operating margins are very high at a given revenue: BCH margin was over 43% on only $ 59 mill. revenue! 

 

This leaves many other companies working at the commodity level: High revenue, high costs and consequently lower margins.

Peter Maiden referred to this in his: " Collection House win more business" of May 8, 2001. Worth reading!

 

While there will be competition at the fringes, the real competition in Australia will be between The Alliance ( a joint venture of DAD with BCH ) and CLH, I believe.

 

And there is room for both in this large market where work is continually expanding because of the introduction of new services! CLH is very nimble and has the connections !

 

Some companies are using a lot of publicity indicating that " they will take on either BCH or CLH ". The aim of the publicity is to raise share prices and it reads well !  I can see the BCH and CLH managements grinning whenever they read that sort of stuff!

 

Anyway, there are other, more pressing matters to consider! 

 

Those are my opinions,

 

I do hope that you will do well!

 

Gerry

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Disclaimer: Readers are not asked to buy, hold or sell shares in any company. To do so will be entirely at their own risk.