Forum Archive Index - July 2002

["Lindley Smith" <lindleysmith@bigfoot.com>]

They definitely don't seem to be capable of getting a decent return on their capital. Even at the peaks in their markets they didn't manage to get a decent return (from what I remember).

 

Presumably if IP thought they were onto a good investment they may have taken them over by now. Maybe that's an indication that IP don't think they're onto a winner.

 

It would be interesting to see which parts of their business do/don't make a decent return, or are capable/incapable of a decent return.

 

Maybe if their assets are such dogs they should write down their assets by a few billion to more realistic values.

 

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

From: winner69 .

To: sharechat@sharechat.co.nz

Sent: Friday, July 19, 2002 10:32 AM

Subject: [sharechat] CAH

Good responses Hoop and Snoopy but you have not convinced me.

 

In spite of your ravings about where CAH might be heading wouldn't you be worried about what Liddel was quoted as saying in the NBR today. Things like cautious about the outlook for the second half and the second half would be about consolidating the gains of the first half rather than continuing the trend.

 

That suggests about $150M at most for the year (remember they don't pay tax ). Still a long way to go to get your $450M Hoop.

 

Even $150 is still a huge destruction of value - isn't it driven from $6.4 billion of capital. (Snoopy - I got the cost of capital from Pricewaterhousecoopers)

 

One other thing that puzzles me is that expenses (not including interest/goodwill/depreciation) aren't coming down - $402M this year v's $400M last year for the six months to June.

 

Agree with both of you that we should be looking at the future but I can't really see where the 'gap' between where they are now and where they should be is going to come from.

 

No doubt we (along with JB Were and others no doubt) agree to disagree.

 

Good hearing from you anyway and glad that you have made something from CAH over the last year. Well done 

 

 

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