Forum Archive Index - September 2001

["Richard Hooper" <hoop@ihug.co.nz>]

Hi Mike

DPC  seem to have opted in accumulation at present but they I think believe that the synergy affect will take care of any unforessen problems with the ecomony. Management seem to have their heads screwed in place as they are investing in common thread areas. If I remember reading an article way back when the shareprice was sliding away from its high of $1.60 that one of the reasons (apart from shortage

of shares..supply/demand. then oversupply ..profit taking etc) was that the economy was expected to decline which raised the prospect of increased risk of non-repayment of debt. This has happened and it was not as scarey as some made it out to believe .NZ is in higher growth mode now so this area should now in theory be of less importance. For a while I thought Management were playing with mirrors the way the result was presented ,but when they bought Lynx Finace for $7M cash ,and not resort to issuing rights or notes or any other type of fund raising vehicles, it must show that the company is in good health.

Read my other post .re DPC

Cheers

Hoop

----- Original Message -----

From: Mike Hudson

To: Sharechat

Sent: Tuesday, September 04, 2001 2:41 PM

Subject: Re: Re: [sharechat] dpc

Hoop.

Good on yer mate, we need a bit of stirring up - it is getting a bit boring and over analytical.

 

I have a similar view to you on DPC but the recent full years result did not make good reading which IMO has kept the share price flat. On the face of it the results looked good with an increase in Profit After Tax of 19.8% but there was a large tax credit (due to a change in tax treatment of the insurance subsidiaries) and the actual Profit Before Tax fell by 19.2%

 

Also Bad Debts written off for the year of $2.4m on finance receivables of $120m seems rather high to me given that they presumably lend on a fully secured basis.

 

The test will be how well they can integrate the businesses they have bought and how quickly they can achieve the scale they need to dilute the effect of their rather high overheads.

 

Having said that they seem to be on the right track and I'll hang on to my shares for a while.

 

Cheers

Mike H