Forum Archive Index - February 2003

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

Re SLL,

Somebody mentioned that SKC has spare cash.

True, it has $60 mill. to be used for buy-backs. However, at the current SKC prices, that won't happen.

SKC is more concerned with the current expansion plans and the balance sheet than with SLL, I think. I belief that the $60 mill. will be used for building the Convention Centre which happens to cost $60 mill.

SLL has been a very poor investment for SKC. For a start, a paltry revenue of $19.2 mill. and a NPAT of $1 mill. And this against a share price of $1.75!

I would say that SKC would not pay more than 90 cents at this stage.

Yes, SKC made a mistake by buying FORCE Corp. I don't think they will make another one by paying too much again.

So, I suggest that a takeover will not feature very large in the SKC mind. SKC is quite happy to benefit from its association with SLL in other ways and is not likely to want to change that in a hurry.

SKC with a provisional revenue of some $600 mill this year and a guided profit of $105-$110 mill. has other things to think about.

Gerry
Yes, SLL's turn-around from a $5.5 mill. loss last year to the $1 mill. profit now  must have a positive impact on SKC's profits and share price.

 Some distraught WHS and MHI sellers are most likely to buy SKC also. It is a sound investment in my opinion.