Forum Archive Index - October 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

My six year old kid named 'SKC' brought home another good report card 
today.  

It was encouraging to see return on equity jumping from 30 to 33% 
this year.

'Auckland' has always been his best subject with that 
Casino/Hotel/Tower complex seemingly coming up trumps each year.  I 
was a bit worried that being so good at one subject was masking an 
inadequacy in the others.  'Queenstown' has never been that strong 
for him.  Allegedly things are getting better there, but it is still 
a red ink proposition.

'Adelaide' is improving.  Revenue to asset value has gone from 
105,790/270,105 (39%) to 114,602/259,505 (44%).  Losses have been 
reduced from $7.9m to $1.3m.  It's all moving in the right direction, 
but as they say, a loss is still a loss.  The highly profitable New 
Zealand operation has a revenue to asset valuation of 398,354/643,714 
or 61%.   Adelaide has some way to go to match that.

The new subject of 'Hamilton' has got off to a good start, according 
to first hand reports from his tutor on the spot 'Hoop'.  I'm not 
sure how quickly we can expect this one to roll into the black. 

The dividend reinvestment plan has been canned.  Does this signify 
that if shareholders continued to give back money to the company this 
way they would have trouble earning a decent rate of return on it?   
Anyone like to comment if this means that my little SKC has a 
discipline problem?

The main problem I see for SKC is that after years of outperformance, 
everyone has very high expectations of him.   Have a look on the 
focus investment board where I have tried to quantify this.  Are we 
all pushing this little fella too hard?   What d'yawll think?

SNOOPY


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