EBO-Ebos

[Shareguy]

Fair enough - people assess investments from different perspectives ... even if I am not sure whether the historic view (I paid less for the share and therefore my dividend yield is much better) makes a lot of sense.

I always assess investments with a view into the future. If they paid me in the past say 20% pa - great, buy the CEO a drink ... but the only thing which matters from here is what is the investment paying me in future.

Why? Well, assuming the future looks slow, then it doesn't help to dwell on an amazing past - it's just that I can use the invested money much better with a different investment which promises a good future income.

If I look at Ebos - SP went up in the last decade from $9.56 (24/8/14) to $36.40 (today). Not bad, this is a CAGR of nearly 14%. If I add the meagre 3% dividend (just assuming years before have not been better), then this is a return of something like  17% pa. Just one observation (because its anyway in my spreadsheet): earnings CAGR in the last decade was only 7.4, i.e. SP grew twice as fast as earnings. Hmm.

If we take the decade before - SP went from $3.34 (22/8/04) to $9.56; Not quite as good, but still 11% plus divie, so say 14% per year.

I can see why you consider this a good (past) investment.

If you assume that things stay as they have been and EBOS sits in another 10 years at $100, then it makes a lot of sense to hold.

Just not so sure about the latter. Too lazy to pull out old (20 yrs old) annual reports, but I am quite sure that PE for Ebos did increase not just over the last decade (as per above). Anybody knows - winner?

And this is the problem: If part of your SP increase is PE expansion, then this is something which will end at some stage and then there will be a rough awakening.

But given that the future is uncertain (with the exception of death and taxes) - I certainly do wish you that any PE reduction only comes after the SP is not any more relevant for you.

Ah yes - and re FPH. While I obviously don't know either whether they are too dear (given that this is as well dependent on assumptions about the future), what I can say is that I didn't manage to find any set of credible growth and earning assumptions which would justify their current Share Price. Anyway - their future just must be incredible , but this is anyway a different thread;

Anyway - good discussion.

Great post BP. You have got me thinking. Yes I think you're right regarding past performance and costs. I need to give future projections a higher weighting.

I don't see Ebos as a screaming buy at the moment and for anyone considering buying I would wait until the government wholesale agreement is concluded. For long term investors though it's a core stock is how I see it.

Future projections are often wrong. We only need to look at our own reserve bank and economists. They are right sometimes but often wrong. I agree death and taxes are a certainity. As far as the future of Ebos goes some say it's not as bright, others would say the sun will continue to shine.

Do I think $100 is a possibility. Yes history says it's a statistical probability in 10 years unless we have a share split.............

[Shareguy]

Interesting article from AFR.

https://www.afr.com/companies/retail/ebos-ceo-takes-swing-at-8-8b-chemist-warehouse-sigma-deal-20241014-p5ki2d

[BlackPeter]

Interesting article from AFR.

https://www.afr.com/companies/retail/ebos-ceo-takes-swing-at-8-8b-chemist-warehouse-sigma-deal-20241014-p5ki2d

Hmm - as long as Ebos was supplying the Chemist Warehouse and making the dosh, it was obviously all good for the market and consumers, but now that the competition is supplying the Chemist Warehouse at better conditions than Ebos, this clearly must be bad for the market   .

Always trust the looser, oops -  the Ebos CEO, he clearly has only the interest of consumers in mind.

[Shareguy]

Good to see the share price getting closer to $40. This reporting period will be interesting.

[winner (n)]

BusinessDesk headline Forsyth Barr downgrades Ebos Group to neutral

Shucks a downgrade

No worries not really a downgrade ....just share price not 'cheap' at the moment

Target price actually raised to $43.20

So no worries in spite of headline

[Left Field]

Interesting ....fairly good result..... but market not impressed. SP down $2.00 for 4% mid aft.

Seems SP got ahead of itself in the lead up.

https://api.nzx.com/public/announcement/446978/attachment/437758/446978-437758.pdf

• Revenue of $6.0 billion (up 9.5%1)
• Underlying EBITDA of $291 million (up 7.1%1)
• Underlying NPAT of $131 million
• Underlying EPS of 67.5 cents
• Interim dividend declared of NZ 57.0 cents per share (maintained at H1 FY24 level)

[BlackPeter]

Interesting ....fairly good result..... but market not impressed. SP down $2.00 for 4% mid aft.

Seems SP got ahead of itself in the lead up.

https://api.nzx.com/public/announcement/446978/attachment/437758/446978-437758.pdf

• Revenue of $6.0 billion (up 9.5%1)
• Underlying EBITDA of $291 million (up 7.1%1)
• Underlying NPAT of $131 million
• Underlying EPS of 67.5 cents
• Interim dividend declared of NZ 57.0 cents per share (maintained at H1 FY24 level)

Looks like, they fit well into our post truth society. Lots of "underlying" stuff which went up (surprise, surprise). Just a pity for them that they still have to publish the statutory numbers as well, which all went down. Need to move to the US, then they can create their own reality and live in it ...

[Average_Punter]

Black Peter - what do you mean by "then they can create their own reality and live in it"?

[BlackPeter]

Black Peter - what do you mean by "then they can create their own reality and live in it"?

Well, that's what the current set of US politicians do, isn't it? Ukraine started the war and Ebos earnings are rising. Same thing.

[Shareguy]

Another equity raise $200m. Has just been added to Craig's conviction list. Will do my normal and wait till the last minute to decide if I participate or not. 

https://www.nzx.com/announcements/449973

[winner (n)]

Forbar did an Ebos rave the other day ...OUTPERFORM

They saw Ebos Group's Australian Biotechnologies is a "hidden gem" while Transmedic offers a solid platform for future growth,

I reckon the recent acquisition SVS Veterinary Supplies will be a winner as well. stuff the vet gives our dogs is expensive so a good segment to be in

Share price nearly back to $40;....will go higher methinks.

[KW]

Does anyone know why EBO isnt in the ASX200
It should qualify with a market cap of almost $7B

[Shareguy]

Does anyone know why EBO isnt in the ASX200
It should qualify with a market cap of almost $7B

A couple of points I think.
 
1/ liquidity, However with Sybos sell down might get there.

2/ Most of trading is on the NZX not ASX

[Left Field]

Results out....

https://api.nzx.com/public/announcement/457547/attachment/450582/457547-450582.pdf


EBOS' operating results included Underlying revenue growth of 12.0%1 to $12.3 billion, GOR
of $1.6 billion and Underlying EBITDA of $585 million, up 7.5% on FY241. The Group also
generated strong Underlying free cash flow of $302 million, with a cash realisation of 109%2
.
The FY25 EBITDA result is in line with our guidance range of $575 million to $600 million.

ps Mkt not impressed today (either was I, but I don't hold.)

[Ferg]

I am curious....what was the market expecting?