Forum Archive Index - September 2001

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

1. Introduction.

Please refer to my " CLH and Baycorp Advantage---- Results and forecasts " of 22 August, 2001.

 

At the current CLH price of $ 4.44, the P/E is 24.6.

Ditto,             DAD price of $ 7.00, the P/E is 42.2.

 

CLH' intangibles are now $ 22 mill. which they are paying off over a 20 year period ( See Annual report ).

 

The to be 'merged' BCH / DAD entity has intangibles of $ 400 to $ 500 mill.!

 

Remarks: In my opinion, I would prefer CLH. In the meantime, BCH will remain in the " Working at the Coal Face series " till Dec 5, when this series will terminate.

 

2. Financial (CLH).

CLH - Annual Report.< www.collectionhouse.com.au >

This company has a fast delivery: Annual announcement on Aug. 22; I received the Annual report on Sept. 5 and the annual meeting is on Oct 3, 11 a. m.!

When reading it, one gets the impression that CLH is highly focussed and that it is an honest report.

 

It has the strongest Board I have come across for many years. Current Assets to Current Liabilities : 3.6. 

 

NPAT / Revenue margin is about 16.5% ( exclude intang.) compared with a regular 28% from BCH.

Conclusion: There is plenty of scope to increase this margin! 

    

Cash at the end of year : $ 31.9 mill. Non current liabilities: $ 6.4 mill.of which deferred tax is $ 2 mill. Current liabilities, including dividends: $ 14.5 mill. Conclusion: CLH is well prepared for its task! 

 

3. CLH: Prospects

CLH has about $ 740 mill. in debt ledgers. I thought that they would have some $ 800 mill. face value worth on June 30, 2002. It is now likely that it could exceed $ 1.0 Bill. on that date!

 

CLH estimates that the revenue of the combined activities associated with the receivables management sector is at present $ A 600 mill. in Australasia. ( I believe that the combined revenues of BCH, DAD, CLH and RMG are about $ A 270 of this total). 

 

Quote: " Commentators have estimated that in the next five years the market will be worth $ A 1.0 Bill.

 

" This assessment may be conservative given that the industry is expanding rapidly as a result of earlier outsourcing and an increase in debt ledger sales."   I want to add that additional products will add to this expansion!

 

In my opinion, once the merger of BCH / DAD has taken place, there will be an increased chance of a takeover of CLH by this merged entity, assuming that the Commission will approve accordingly. 

 

Gerry

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Readers are not asked to buy, hold or sell BCH / DAD or CLH. To do so will be entirely at their own risk.