Forum Archive Index - July 2001

["Second Step" <secondstep70@hotmail.com>]

Hi all,

 

I've done a little comparison between the soon to be listed cabletalk and GDC communications. Both companies have similar sources of revenue(telecom patch contracts), so we should be able to compare P/E ratio's.

 

I've used Cabletalk's forecast for 31 march 2002(Based on the issue price of $0.50 per share) and GDC's historical 31 dec 2000 (using today's price of 2.25).

 

My info sources are http://investor.ninemsn.com.au/Company/GDC-NZ-CH.asp and http://www.ncm.co.nz/news/cabletalk/NoticeOfMeeting.html

 

                                                Cabletalk                    GDC

Revenue                                 46,055,000                 41,300,000 

Operating Margin                10.8%                        14.8%   

Amortisation  of Goodwill    1,308,000                  0

Net Profit                                901,000                     3,020,000

Share on Issue                       36,135,900              37,860,000 

Earning/Share                        .025c                        .08c

P/E                                            20                              28 

    

Cabletalk Group’s FY2002 P/E ratio excluding goodwill amortisation charges is 8.2 times.

So I suppose we could say that Cabletalk is cheaper than GDC.  It is interesting that GDC has a higher operating margin. maybe that is due to some  of the other services they provide.

Credit Suisse First Boston have strong growth forecasts http://au.us.biz.yahoo.com/z/a/g/gdc.nz.html for GDC

31 dec 2001 EPS = 18.37 and 31 dec 2002 eps = 35.08

So if we can rely on the forecast, GDC is now looking at a P/E of  6.4 for 31 dec 2002

 

Any comments?

 

Cheers,

Second

Disc: Do not hold these stocks