Forum Archive Index - May 2000

["Steve Moxham" <steve@ezysurf.co.nz>]

Who else out there is a long suffering shareholder of Cedenco's stubborn share price?

This company to me is an obvious example of an undervalued share, yet its price performance continually drags along the bottom of the market.

A brief synopsis of its fundamentals...

 

Today they announced a much improved half yearly profit of $413,000 up from a loss of $546,000 in the previous half. No dividend has been declared although they intend to make a dividend payment for the full year. The current div yield is 6%. Profit for the year ending 30 Sept '99 was $2.207 million.

Given its latest profit announcement the company trades on a P/E ratio of 4.8. It has negligible long term debt and has an asset backing of around $1.50. Current share price 97c.

 

Prospects are sound with the directors expecting "the growth rate of earnings before taxation to accelerate with the Heinz business coming on stream and other growth initiatives in the company's international food ingredient businesses." 

"The group expects to consume all tax losses and all of the prepaid taxation by the end of the 2001 financial year." This puts the current P/E in a bit more perspective.

 

Off memory, BIL has a holding of around 50% of the issued shares. Actually that may be the problem with the share price. Whatever BRY touches turns to mould! They are currently reviewing their holding and may look to sell in the near future.

 

They had intended to make an announcement in February of this year about a proposed capital distribution to shareholders, however I haven't heard anything since. Can anyone enlighten me here?         

 

Cheers.