IFT - Infratil

[Left Field]

Can anyone explain the big drop in SP given a pretty decent result?  Perhaps Morrison taking a big tranche of their fee in shares, but this should already be factored in?

How about....Market had got ahead of itself...... plus some short term profit taking.

No worries long term.

[BlackPeter]

Can anyone explain the big drop in SP given a pretty decent result?  Perhaps Morrison taking a big tranche of their fee in shares, but this should already be factored in?

Look, I assume you realize that IFT is actually rather dear if you look at its earnings and its historical earnings growth. PE is above 20 ... and growth - well, apart from some historic speculation gains (buying and selling assets at the right time) growth is mainly in the head of the investor.

Sure, everybody assumes that regenerative energies and data storage are growth industries - and they likely are. However - everybody knows that, i.e. all this amazing hope for growth is already priced in by the market, this is the reason the share is currently that dear if you look at their earnings.

So - what you just see are some hype ripples. Hype is not predictable ... but there is a saying about companies whose SP does not grow anymore with good announcements. They say, if that's the case, all good news are already priced in. Maybe a time to review ones position?

Anyway - SP still well in an uptrend, so (probably) - no worries.

[Swala]

Closed at $10 on good volume!

[Left Field]

IFT in trading halt while it raises capital to take their stake in One NZ (Vodafone) to 99%

https://www.nzx.com/announcements/412638

Key highlights

• The Acquisition values One NZ at an enterprise value of NZ$5.9 billion[1] and an implied EV/EBITDA multiple of 9.8x [2] for Infratil's increased stake and a normalised EV/EBITDA multiple of 9.3x [3]
• Increased conviction around data and connectivity tailwinds and strong trading momentum, with further upside expected through its simplification initiatives, supports further investment in One NZ
• Full control provides business plan flexibility and a focus on long term value creation under 100% New Zealand ownership
• One NZ continues to deliver strong, stable cash flows and is well positioned to achieve a target 30% EBITDA margin in the near term
• Strengthens Infratil's cash generative core, providing stable and growing cashflows to support further Infratil's development platforms
• FY2024 Proportionate EBITDAF guidance range increased to NZ$800 million – NZ$840 million, reflecting an increased contribution from One NZ
• Underwritten [4] NZ$750 million Placement ('Placement') priced at NZ$9.20 per New Share ('Placement Price'), representing a 8.9% discount to last close and a 7.9% discount to 5-day VWAP of NZ$9.99
• Retail offer of NZ$100 million (plus the ability to accept oversubscriptions) enabling retail shareholders to participate in the equity raising on a pro rata basis
• Post equity raise and completion of the One NZ transaction, Infratil's wholly owned group gearing is expected to be 18.7% [5] with NZ$927.7 million of available liquidity [6][7], , providing flexibility to support growth investment across Infratil's portfolio
• The acquisition is unconditional
• Completion of the One NZ investment is expected shortly after receipt of the Placement proceeds

[Waltzing]

Its a Biggy ....

"30% EBITDA margin "

while HLG has been the big one in focus here this is a whale by comparison...

Infratil has a mix of investments across the energy, transport, communications and healthcare sectors.

In May, it reported a 28% fall in annual profit after making less from asset sales.

Profit dropped to $891.7 million in the year to the end of March, from $1.23 billion the previous year. Revenue fell 7.6% to $1.9b.

[teabag]

Based on the shares being offered at $9.20, the total number of shares after the wholesale and retail offers are taking up will increase by 12.4%

[Red Baron]

Its a Biggy ....

(The former Vodaphone NZ, now 'One') "30% EBITDA margin "

EBITDA Margin at Spark over financial year 2022 vas $1,150m/$3,720m = 30.9%

EBITDA Margin for Telstra over financial year 2022 vas $7,256m/$21,277m = 34.1%

Interesting.

RB

[BlackPeter]

EBITDA Margin at Spark over financial year 2022 vas $1,150m/$3,720m = 30.9%

EBITDA Margin for Telstra over financial year 2022 vas $7,256m/$21,277m = 34.1%

Interesting.

RB

Why would EBITDA be of any interest?

The only thing which matters are Earnings After Interest, Tax, Depreciation and Amortization, since these are the only Earnings which stay in your pocket.

[Ferg]

Interesting indeed Snoopy.  All 3 are within a relatively tight band.

Analysts use EBITDA to assess FCF and its potential.  I take issue with this given DA comes from capex which was a cash outflow at some point, which may be required again in future.

Other analysts prefer EBIT to measure core profitability independent of funding structures and tax regimes.  Under new owners the funding structure of a business often changes.  Tax rates vary in differing countries which allows cross-border valuation comparisons.

NPAT is a blunt tool for valuation and/or profitability comparisons given differing funding structures and tax jurisdictions.

[Red Baron]

Interesting indeed Snoopy.  All 3 are within a relatively tight band.

You should not convuse us.  Zome zay the only reason the Red Baron exeests today is vrom the vivid imagination of that mangey flea ridden mutt that should not be mentioned (which nevertheless you did).   However, I think you will vind I am very different vrom heem.

Vor I start, I stand for traditional German virtues:   Hard vork, straightforwardness and good beer. Try lapping that up out of a zupper dish and see how var you get!  In vact there is only one I stand against more than that Sopwith Camel steering, baron slandering, flea circus in fur (even if I do make an exception vor Christmas day).  And that is the one that has brought more shame on the proud German nation than any other.  That ridiculous renegrade third reich fantasist, the  recycled Austrian restaurateur, 'Adolf Eatler'.  Complete vith his clown mimicking Charlie Chaplin moustache!   I am glad that clown has gone down.

RB

[Crackity]

EBITDA Margin at Spark over financial year 2022 vas $1,150m/$3,720m = 30.9%

EBITDA Margin for Telstra over financial year 2022 vas $7,256m/$21,277m = 34.1%

Interesting.

RB

I'm off to the Eden Park drinks and presso tommoz

Maybe they'll tell us why IFT didn't buy 100% of Voda NZ at the start  🤔

[teabag]

Huge end of day trade on Friday, over 2.8m shares at $9.625  Anyone know who's selling?

[BlackPeter]

Huge end of day trade on Friday, over 2.8m shares at $9.625  Anyone know who's selling?

Wasn't Friday one of these rebalance days? In that case it's typically funds selling to each other. No worries, it's all controlled by algorithms ... no human intervention required.

[teabag]

True, it was rebalancing day on Friday, I am curious as to what instos were selling?  Half the SP drop has been clawed back already.

[BlackPeter]

True, it was rebalancing day on Friday, I am curious as to what instos were selling?  Half the SP drop has been clawed back already.

Why would you be curious? It is not as if fund managers of index funds would have any choice on rebalance day ... they sell if they have too much (as determined by the percentage in the index) and they buy if they have not enough. No braincells get damaged in this process.