Forum Archive Index - May 2000

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

>>.    This gives EBIT of around
>>7million and I reckon with all the restructuring going on, the
>>Ceramco accountants will be clever enough to see them pay no tax
 >>in the  2001  year.    So we get a market valuation of $56million 
>>for the company, which divided by the 30.33 million remaining 
>>shares gives a valuation of $1.85 per share.
>>>
> I agree with it in part but you have forgotten about the balance of
> the $41m from China Clays cash ($41-16-9)=$16m
>
Well spotted Jim.   I wondered who was going to pick up the 
deliberate mistake ;-)

That changes the NTA of the shares left to $2.38.
> 
> Over the 30m shares this is a further 50cps
>
We seem to agree on that bit.
>
> plus they have $13m in  corporate assets.
>
Not sure what happened to that, or even where that figure is from.  
1999 annual report lists corporate assets of $20million, but that was 
before all the expense involved in closing down the NZ factories and 
paying redundancy to their workers, and writing off whatever leases 
are left on their properties and land.

So reworking the figures: 
For every  4  Ceramco shares you hold now, you will get 3 of
these new shares plus $1.59 cash.    This gives a theoretical on
market price for Ceramco today of (3(2.38)+1.59)/4=$2.18.

I can't quite work out if these assets include brand valuations.  
Does anyone know?

$2.18 is quite a premium on what Ceramco closed at today.   But I 
guess part of the discount is that they haven't let us in on their 
new direction.  Maybe tomorrow all will be revealed?
> 
> Their EGM is tomorrow , I may just go for the fashion parade, but I
> will buy some first. 
> 
I don't think it's a screaming buy as growth prospects must be a bit 
clouded.  In 1986 Bendon had an EBIT of 13.1 million, and next year's 
projected EBIT figure is only half that of 14 years ago!   I don't 
think management have a great record in this company.   And Jim, 
please tell us how the parade went. SNOOPY




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