Forum Archive Index - November 2003

[nickk@quicksilver.net.nz]

Snoopy 

This made me chuckle.  I haven't 'badgered' you at all.  I haven't posted 
here for a long time.  I was just curious - didn't mean to strike a raw 
nerve. 

Nk 

tennyson@caverock.net.nz writes: 

> 
> Hi philip, Nick, Macdunk et. al 
> 
>>
>> Does anyone have a view on WRI’s latest downgrade? 
>>
> 
> nick wrote: 
>> What is your position on WRI?  
>> 
>>  From memory you raved about the company for a while.  Do you still > hold?  
>Can you put a positive spin on this one a-la RBD? 
>> 
> 
> Sorry nick, no can do.   It was me that caused the WRI share price to 
> plunge.    I have just sold all my WRI shares and bought gold...... 
> 
> Hmmm,  well maybe not, but I somehow think you will keep badgering 
> me about WRI until I announce that I actually have done what I just 
> 'announced'. 
> 
> I could, of course, point out that in USD terms the price of WRI has 
> never been higher.     But since I don't live in the USA and spend USD, 
> I suspect this observation is largely irrelevant...... 
> 
> Macdunk wrote:
>> Sept 2002 I sold Wri shares and posted that I expected their
>>profits to take a tumble I was wrong In one regard 
>>It took longer than I anticipated. 
>>
> 
> It seems some people are so tuned into their share price charts, they 
> have forgotten what actually happened.   WRI profit for FY2002 
> $24.2m.  WRI profit for FY2003 was $21.7m.  So you weren't wrong 
> Macdunk at all.  You were dead right.   The thing you were wrong 
> about was that you expected the share price to go down when the 
> profit went down.    In fact quite the opposite happened.    The share 
> price went up on the profit reduction just as *I* predicted. 
> 
> mixtrader wrote:
>> I believe that fundamentally the company is in good health, the current
>> state of the high dollar and somewhat depressed export market are what I
>> think is slowing them down a bit. 
>>
> 
> Yes, I have a feeling the the $NZ/$US cross rate is reaching the upper 
> limits of what WRI management were expecting.    It could get worse, 
> but then this might even be good for WRI longer term.   With some of 
> the banks up north making rumblings about the level of loans to 
> farmers and getting nasty, what a great time for an alternative lenders 
> such as WRI to be getting back into the farmer finance market! 
> 
>>
>>I would love to hear others views on this company, particularly the
>>current governance and management and what they are doing to 
>>shareholder wealth. 
>>
> 
> I know the exercise of options by senior management at only 57c 
> raised some eyebrows.   However, I think this is a legacy issue caused 
> by the very rapid appreciation of the WRI share price in the last five 
> years.  I don't object to senior management having share options.   
> And the pricing of 57c was right at the time they were issued. 
> 
> And now the real issue.  The recent profit downgrade announcement. 
> 
> "At our Annual Meeting in October we advised that our earnings before 
> interest and tax (EBIT) for the year to date was approximately 10 per 
> cent behind last year. This downward trend has continued, and the 
> Group's EBIT performance for the six months to 31 December is 
> expected to be around 20 per cent behind the same period last year," 
> said Chairman, John Palmer. 
> 
> Last years first half profit was  $4.1m.    Because WRI is a low debt 
> company we will assume that the reduction in EBIT will be reflected 
> directly in a reduction of profit.  A 20% reduction in profit brings that 
> down to $3.3m. 
> 
> Last years second half profit was $21.2m-$4.1m= $17.1m.  If we 
> assume second half profit is reduced by 10%, in line with the long term 
> outlook at the AGM, then second half profit will be: 
> 
> 0.9x$17.1m= $15.4m, or adding those up: 
> 
> $15.4m+$3.3m= $18.7m for the full year. 
> 
> Based on the 138,697,202  shares currently on issue, that gives a 
> profit of 13.5c per share.  Dividend paid out last year was 11.5cps. 
> 
> IOW, the dividend looks safe to me, and the current yield is around 
> 13% (gross) based on a share price in the low $1.30s.  WRI looks like 
> a 'buy' to me on fundamentals.    And I haven't even talked about the 
> Craig Norgate factor.  My pick is that he will be back to shake out a few 
> more 'weak sellers'. 
> 
> SNOOPY 
> 
> discl:  hold WRI 
> 
>  
> 
>  
> 
> 
> --
> Message sent by Snoopy 
> on Pegasus Mail version 4.02
> ----------------------------------
> "Q: If you call a dog tail a leg, how many legs does a dog have?"
> "A: Four.  Calling a tail a leg doesn't make it a leg." 
> 
>  
> 
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