Ecoya 2010 Full Year Profit: More of the same to come?

Ecoya Ltd [ECO.NZ] had its IPO listing on May 3 2010 and its 2010 full year profit snuck out to the market late last Friday isn't going to blow out all the candles on your celebratory cake.

For starters the loss indicated by management in its prospectus, at $2.35 million, is almost $100,000.00 more than forecast on revenue of $3.9 million.

The loss is around 250% more than the previous year.

These forecasts were stated in the Ecoya Prospectus just 2 months ago.

The differences in forecasts and actual results were explained variously as unexpected stocktaking and variances in customer receipts.

There is also some more expense for shareholders down the line with up to $675,000 to be lent to "employees" (see directors) to buy ECO shares. This sum is 6.5% of the $10.1 million raised.

To be fair the company is in its listed infancy but it has been operated by the current management for a number of years as a private business so they should have an accurate handle of the way the business operates by now and quite clearly they don't.

I would rather have seen the company under promise and therefore over deliver but the current result would put a sout taste in the mouth of shareholders, especially considering ECO shares are down more than 10% thus far.

Having been a negative bugger, their first profit report as a listed company shouldn't rule out any sort of recovery in company fortunes sometime in the future but to kick off business in this manner isn't a good look.




Ecoya main shares are trading at 89c on extremely low volumes, its low for the year.


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From Fishpond.co.nz



Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz




c Share Investor 2010

Patience Will Pay off

I am getting a wee bit excited again because of the global market turmoil and downwards stockmarket prices - it is dull and dangerous when share prices rocket beyond their real intrinsic value - because good stocks are starting to look attractive again.

I started buying stocks in the Share Investor Portfolio again when they approached my ball park for buying back in April 2009 and didn't stop until shelling out $35,000.00 for Mainfreight Ltd [MFT.NZ] and The Warehouse Group Ltd [WHS.NZ] in July of that year. I got what I thought were comparative bargains and was happy with my purchase then and still am now.

The thing is, and this was inevitable given the fragile nature of the worlds economy, markets have stepped back into the fear cycle due to the bleak outlook and have started moving in a southwards trajectory.

Bad if you bought at the peak of the buying frenzy over the last year but good if you are the patient little tortoise just peeking out from under your shell again.

It is clear to me though that this is just the beginning of a market slide and better opportunities await for those will to marketwatch and twiddle their thumbs for a while.

Over the last year or so we have seen markets like the DOW recover from their lows to be up by more than 60% at its peak earlier this year, a rise bigger than the one after the great Wall Street crash of 1929. We have to expect, given that, that our markets are going to correct themselves from these peaks and find a level more suited to the uncertainty and bleak outlook for the global economy and as markets always overreact to bad and good news we will probably see some relative bargains to be had.

The DOW trading at levels close to its pre Sept 2008 slide high, is not an index that mirrors what is happening now, let alone what could happen in the future with all this State debt sloshing around.

The New Zealand Stockmarket has lost around 10% off its mid April 2010 peak to finish at 3047 on the Top 50 Gross Index last Friday and as night follows day it always follows the fortunes and misfortunes of its much bigger brother across the Pacific and then a few thousand miles more.

Be ready then to buy as the market falls. Buy good quality and the best buys are often stocks you are already holding in your portfolio that have perhaps dropped below your initial buy price. Hell you bought at that price, if they are on sale and the long term company prospects are good why not stock up?

The key is patience though. I think markets are going to fall a significant way from current levels and some stocks are going to come off worse than the average. It is very hard to pick market lows (I would say impossible) so buy at levels you are comfortable with but don't buy yet - unless you know something I don't.

A slow race to the finish line will make you a winner.


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From Fishpond.co.nz - Every Bastard Says No: The 42 Below Story


c Share Investor 2010

Fisher & Paykel Appliances 2010 Full Year Profit Analysis

The 2010 Full Year result for Fisher & Paykel Appliances [FPA.NZ] out this morning should leave shareholders feeling a little green around the wallet.

In relation to the 2009 Full Year result of $33 million the 2010 $83 million loss on revenue down 15%, while possibly better than most thought it would be, is nonetheless a testament to management failure.

Both the 2009 and 2010 full years were marked by one off "restructuring costs" and there are probably more of those to come but normalised profit (which FPA like to point out) has almost halved from 2009.

Revenue in Australia has improved significantly and New Zealand revenue has stopped falling.

Notably though North American sales have collapsed over the last half, while European revenue has more than halved in the 2010 6 months.

These markets were trumpeted by management as high growth and while other appliance makers sales have improved in these markets as the economy is stimulated by taxpayer handouts the more expensive and unreliable FPA product has been languishing on the shelves.

A plant built in Mexico to meet this demand has been underutilized and value of it written down this year.

Net debt, while reduced significantly because of a capital raising and bailout by Haier in 2009, at $179 million is still way too high and likely to increase and need further attention in the medium term, especially if sales don't improve.

The outlook for 2011 remains bleak in my opinion and further losses look to be on the cards even if sales improve.



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c Shareinvestor 2010

TSB Bank VS Kiwibank

The fuss made from the left over a possible part sale of Kiwibank would be easy to understand if the bank was a roaring success but the bank that was set up in the early 2000s to buy votes for Labour and Jim Anderton has been a drain on taxpayer funds since then.

You will read the exact opposite in the mainstream left media but this particular Government Department just doesn't cut it.

A $NZ 125 million set up cost and continued subsidization from New Zealand post means Kiwibank has been a big failure.



Some forget what happened last time politicians got involved in banking in New Zealand, with the BNZ having to be bailed out by the taxpayer in the late 1980s after it went belly up. Why do some insist we keep something because it makes Kiwibank customers feel all warm and fuzzy while the rest of us subsidise them with our taxes?

A possible float of Kiwibank would ameliorate the demands of Kiwibank management for more taxpayer dosh for expansion of the bank.

I am of the view that the bank be sold outright and the money returned to taxpayers but any float, partial or full would benefit the bank and the company in one fell swoop.

We have a smaller bank, TSB Savings Bank, that is community owned and it has powered ahead the likes of Kiwibank without taxpayer handouts, growing business a real and sustainable way by using largely customer deposits to lend to other customers (you know, how a real bank operates)

By subsidising the likes of Kiwibank we stifle real private business like TSB. When their competitors have the advantage of taxpayer funding it really isn't a level playing field. The only winners are the bureaucrats working at the bank.

So, lets float or sell Kiwibank. In the long-term it is going to save us alot of money.

TSB have just announced their 23rd consecutive annual record profit of $51.2 million, up 19% on last year. This compares with a $23.4 million half year 2009 profit (bolstered by NZ Post & taxpayer funding) by Kiwibank, down 9% on last year. TSB have acheived their results on less than half the assets that Kiwibank has on its balance sheet.

Figures don't lie.


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c Share Investor 2010