Forum Archive Index - March 2002

["Paul Frost" <frostpt@ihug.co.nz>]

The subject header could just as easily read "The Unknown Company", or "Our Smallest Listed Retail Stock", or "Our Smallest Listed Stock".

 

The stock in question is Retail-X (RTX), an NCM production.

 

Retail stocks are currently flavour of the month with WHS and BGR hitting new highs and a lot of interest generated by the PRG and BEN situation.

 

RTX is definitely not in the league of any of the above companies.It is truely a minnow.Current market capilisation is approximately

$620,000.Based on their last annual report 10,000 shares would be enough to make you a top 20 shareholder (last sale price .20c)

 

Their are two areas to the RTX business.One is "RSL Management Services" which operates and owns various retail management contracts for a number of well known shops such as Stirling Sports, Toy World, and Linen Cupboard.These shops are mainly located in Christchurch but are spreading to other parts of the country as the number of Management contracts owned by RTX increases.

 

The other part of the RTX business is "E-Prepaid Ltd.This is a prepaid internet purchase card, allowing people to make purchases over the internet who would not neccessarily have access to a credit card.This part of the business is of dubious value in my opinion.

 

If we use the auditors valuation report for the "key transaction" and asign zero value to E-prepaid (the Auditors gave it a minimum valuation of $325,000, but I'm trying to be realistically conservative), and accept the auditors minimum valuation of $675,000 (this is

after having applied a 35% discount for lack of marketability) we have a valuation for RTX of about .22 cents per share.

 

On the face of it there wouldn't appear to be much upside on their current share price of .20 cents, however my valuation is extremely conservative. A lot will depend on the management skills of the chairman and managing director Mr Mark Taylor.

Their latest half year report was relatively positve with RSL trading profitably and 5 more store management contracts having been added in the period in question.

 

The above should not be considered as a recommendation as a to buy RTX shares.The company is extremely thinly traded and has a limited history.

 

As for status seekers, you should bear in mind that you have as much chance of picking up 10,000 shares in RTX at .20cents

as the "Black Caps" have of winning the 3rd test.

 

Discl. Shareholder in WHS,RTX.

 

Regards

 

Paul F.