# HST - Hastie Group



## lucifuge (3 March 2008)

*Date: 	27/2/2008
Author: 	Michael Smith
Source: 	The Australian Financial Review --- Page: 53*

Australian building services group Hastie has acquired a similar company based in Great Britain for $A204m. Rotary is a provider of electrical, air conditioning and maintenance services in the UK, Ireland and the Middle East.Hastie CEO, David Harris, said the acquisition will provide the group with immediate scale in the British market and expand its operations in the Middle East. Hastie has reported a 45% increase in net profit to $A14.5m for the first half of 2007-08, and has forecast earnings per share growth of 50% for the full year


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## lucifuge (3 March 2008)

*Re: HST - HASTIE GROUP LIMITED*

Attached is the daily chart for HST. Up to Jan2008, HST had been pulling a rate of return of 100% pa.


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## Dutchy3 (20 July 2008)

Hi lucifudge

Probably still is .... just have to be short rather than long. This one offered via CFD ...


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## michael_selway (21 July 2008)

Dutchy3 said:


> Hi lucifudge
> 
> Probably still is .... just have to be short rather than long. This one offered via CFD ...




Hm this one appears tohave good numbers, but maybe a lot of risk to go with it

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 18.3 28.1 36.0 38.7 
DPS 11.2 15.9 20.2 22.5 *

thx

MS


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## Dutchy3 (21 July 2008)

michael_selway said:


> Hm this one appears tohave good numbers, but maybe a lot of risk to go with it
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




2.44 with half and Hour to go .... will this collapse back down on the close of possibly put in a Peircing Line to cloud Fridays Big Black?


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## Miner (29 July 2008)

SHOULD I BELIEVE THIS RECOMMENDATION ? 

Probably not but will he change his comments to buy when others start selling on reaction of his article :

*SELL RECOMMENDATION 

SCOTT MARSHALL
SHAW STOCKBROKING


Hastie Group (HST) *HST is a leading supplier of mechanical and electrical building services and refrigeration systems in Australasia, the UK and the Middle East. HST is exposed to the non-residential construction cycle, a sector that tends to be late into an economic downswing and late out. Exposure to the non-residential construction cycle is adversely affecting investor sentiment.


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## hangseng (29 July 2008)

I for one won't be believing it. The view is short term and limited in the extreme and completely overlooks the sound fundamentals of HST.

This is a very sound company to invest in for the long term IMO and I did just that. HST isn't a popularist or hyped up stock, but it has everything you would normally look for in a quality long term investment.

From the Shaw website, maybe they should read their own work:

17/03/2008 - Hastie expands commercial hydraulics business into Qld
Hastie Group Limited (HST) has acquired Beavis & Bartels and GTS Plumbing for $21.5 million. The company said the purchase would help it deliver the promised 50% increase in EPS growth in FY2008 as it expanded its commercial hydraulics business to Queensland.

26/02/2008 - Hastie books cool H1 profit, acquires Rotary
Hastie Group Limited (HST) announced a record first half profit increase of 45% over the previous corresponding period. The company announced separately it was expanding further into the UK, Ireland and the Middle East with the acquisition of building services company Rotary Limited for 94.8 million pounds ($202.13 million) in cash and shares.

28/08/2007 - Hastie Group announces 66% rise in FY profit
Hastie Group Limited (HST) has announced a 66% increase in profit after tax to a record $22.2 million for the year to 30 June 2007. The building services and refrigeration systems company said revenue increased 62% over last year’s result to $779 million, while earnings per share were 47% higher at 19.3c per share.

19/07/2007 - Arasor: A Fast Growing High Tech High Flyer With A Lack Of Hype 
The technology sector on the Australian share market consists mostly of software sellers and developers a la MYOB (MYO) and Oakton (OKN) and service providers such as Melbourne IT (MLB) and Computershare (CPU). The difference between these companies and the likes of Texas Instruments and JDS Uniphase -also labeled technology companies- is arguably as large as with refrigeration company Hastie (HST) and shipbuilder Austal (ASB). 

17/04/2007 - Hastie Group makes NZ acquisition
Hastie Group Limited (HST) today said it has acquired 60% of the contracting business and 100% of the service business of New Zealand’s Aquaheat Industries Limited. The air conditioning and refrigeration company said the agreement would enable it to increase its share of the contracting business to 100% within five years.

28/02/2007 - Hastie Group unveils 65% rise in 1H profits
Hastie Group Limited (HST) today announced a profit after tax of $10.1 million for the six months to 31 December 2006, a 65% increase in underlying earnings. The group said that revenue increased by 63% to $353.9 million, with the result demonstrating growth potential for Hastie's business model and the demand for services. 

18/01/2007 - Hastie scores $52m Abu Dhabi deal 
Hastie Group Limited (HST) announced it had won a contract in Abu Dhabi with an expected value of approximately $52 million. The contract will see Hastie install air conditioning in a 190,000 square metre shopping mall to be constructed immediately.


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## Miner (22 September 2008)

Extract from Compare Share as produced broker recommendation on HST

SCOTT MARSHALL
SHAW STOCKBROKING


SELL RECOMMENDATION

Hastie Group (HST)

HST is exposed to the non-residential construction sector. This industry has an accentuated cycle, albeit one that tends to be out of step with the broader economy. Hastie provides air conditioning and refrigeration solutions to the industrial and commercial sectors. The long time lines for non-residential companies tends to ensure they are late into the downswing and, equally, late coming out. *If this downswing turns out to be deep and protracted, then this sector will be badly hurt, and HST with it.
*


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## Miner (30 October 2008)

Miner said:


> Extract from Compare Share as produced broker recommendation on HST
> 
> SCOTT MARSHALL
> SHAW STOCKBROKING
> ...




How strange HST was SELL in Sept and in Oct Bell has said it as buy

THis is to repeat its recommendation. See attached

Disclaimer: i do not own HST and you may read this link too 

https://www.bellpotter.com.au/ca25/Research/GetFile.aspx?id=2438af0d-ccc2-4e58-b717-65463c4d8b7b


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## Calliope (5 December 2008)

Hastie will be admitted to the S&P/ASX All Australian 200 index at close of trade 19 Dec. In the good old days this would have boosted the price, but in this climate it doesn't help.


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## Hedders (18 June 2009)

What's happening with Hastie? It's fallen over 10% in the last 2 days- way more than the index avg. Can't see any announcements though. Anyone have any ideas?


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## dirkdiggler444 (18 June 2009)

The share holders that participated in the SPP (1 for 4 deal) received their shares today (possibly yesterday, though I couldn't trade mine yesterday) @ a SP of $1.15, so the SP which was up to about $1.35 by the end of last week, has been eroded over the last couple of days in particular as people sell their existing shares, and hang onto their new cheaper ones.

ie, first you hold shares, buy another 5000 shares through SPP at $1.15, then sell some of your original holding at market for $1.35 and make a profit of 20c per share, and you haven't reduced your holding.

I predict it will gradually rise (assuming the market does) as the bulk of these SPP shares get sold off early, and then normality comes back.


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## Hedders (18 June 2009)

dirkdiggler444 said:


> The share holders that participated in the SPP (1 for 4 deal) received their shares today (possibly yesterday, though I couldn't trade mine yesterday) @ a SP of $1.15, so the SP which was up to about $1.35 by the end of last week, has been eroded over the last couple of days in particular as people sell their existing shares, and hang onto their new cheaper ones.
> 
> ie, first you hold shares, buy another 5000 shares through SPP at $1.15, then sell some of your original holding at market for $1.35 and make a profit of 20c per share, and you haven't reduced your holding.
> 
> I predict it will gradually rise (assuming the market does) as the bulk of these SPP shares get sold off early, and then normality comes back.




Oops- I'd forgotten about the 1 for 4 deal. Makes a lot of sense now! Looking forward to a return to form soon. From what I can see HST still looks like good value in the longer term.


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## imajica (21 June 2009)

according to recent broker consensus estimates:

we have:

2 x strong buy

3 x moderate buy

4 x hold



CREDIT SUISSE - AUSTRALIA 
FORESIGHT SECURITIES 
E.L. & C. BAILLIEU STOCKBROKING LTD. 
ABN AMRO 
J.P.MORGAN 
UBS 
PATERSONS SECURITIES LIMITED 
MACQUARIE RESEARCH 
CITI 





IMO Hastie was severely oversold and will bounce to more realistic levels. I'm not sure if we are going to see $4 a share anytime soon but levelling out in the $1.50 - $2  range is entirely reasonable.


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## imajica (28 July 2009)

Here is a 10 day chart for HST. Looking good methinks - strong buying - if the dow holds up should burst through $1.50


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## Hedders (11 August 2009)

You were right on the money with this one, Imajica- hope you benefitted from your own opinion! Any thoughts as to where Hastie will go now? Do you think their full year report will look okay?




imajica said:


> according to recent broker consensus estimates:
> 
> we have:
> 
> ...


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## grants (25 June 2010)

HST recently purchased Spectrum Fire at a basement price. A Fire Service company should sit well in their business once they stop Spectrum's money bleed.

Spectrum seem to have some top contracts that should be profitable under the right management.


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## cookiemonster (4 December 2010)

Does anyone know why Hastie is so undervalued by the market at the moment and falling against market trends? They are trading at a current PE of about 6 and returning over 8% via a dividend. They have a full order book for the next year and even allowing for the downturn in construction that is still hitting their business they should still earn 10c to 16c a share which would give them a PE of about 6 to 9. They do not have excessive debt levels and their 30% exposure to foreign earnings would, one thinks, have seen the worst of its exchange rate effects. Revenues have been holding up fairly well though margins falling. The construction outlook is also improving next year. I suspect some short selling has put downward pressure on Hastie and created value. As well as there being an over reaction to profit warnings.


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## skc (6 December 2010)

cookiemonster said:


> Does anyone know why Hastie is so undervalued by the market at the moment and falling against market trends? They are trading at a current PE of about 6 and returning over 8% via a dividend. They have a full order book for the next year and even allowing for the downturn in construction that is still hitting their business they should still earn 10c to 16c a share which would give them a PE of about 6 to 9. They do not have excessive debt levels and their 30% exposure to foreign earnings would, one thinks, have seen the worst of its exchange rate effects. Revenues have been holding up fairly well though margins falling. The construction outlook is also improving next year. I suspect some short selling has put downward pressure on Hastie and created value. As well as there being an over reaction to profit warnings.




Management is estimating EBIT ~$73m. HST has debt of $188m so interest bill is ~$15m at ~8%. With 30% tax, NPAT would be $40.5m, or ~17cps. This means a current PE ~5.8.

Management also estimate H1/H2 split to be 35/65. So assume H2 doesn't improve we get EBIT ~$51m, which means NPAT $25m, or 10.5cps. PE 9.4.

Most building sector stocks are at PE ~10... so I think the current sell off has priced in all the risk but not a lot of upside. May or may not be a bargain yet given the uncertainty.


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## pedalofogus (7 December 2010)

Getting sold down a fair bit again today, down to 92 cents at one stage (represents a 5% drop today).

From memory I think the lowest SP in the stock's history was approx 95cents (during the GFC sell down).

I am keen to use this as my point to get back into the stock, but just not sure if it can drop any further?


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## ParleVouFrancois (7 December 2010)

I'm not sure what kind of an answer/response you're looking for pedalofogus, reassurance that you're buying at the right time? Or reassurance that you're buying quality? 

I've had a look through their recent presentation to Southern Cross Equities and their declining business segment revenues and profits look concerning, and along with their Q1 prediction that "business convictions remain difficult" I would hesitate to put money into this atm. 

However there might be an opportunity as most other punters probably think similarly, if HST can stop it's decline it'd be a nice buy at these levels (16 cents per share earnings, 9 cents dividend or about 9%) and if it can even manage to start growing again it'd be a brilliant buy. 

That all being said I can see other companies with more exciting potential/value, but if you're a fan of HST I suppose now would be an alright time to get in (I don't really have any knowledge of TA so Technically it might be good to wait until a base is formed, or something).


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## pedalofogus (7 December 2010)

Yeah, that's exactly it.  If a base can be formed, then technically it looks pretty good.

The fundamentals look pretty good also, in that the 'forecasted' EPS and DPS are very attractive at these levels.

However, this is a company that has produced profit downgrade after profit downgrade, for a long period of time!  And that is the concern i was expressing.  How do we know that the profit downgrades have finished?

I am a fan of HST and have been for a long time.  I know people who work for HST's underlying businesses, and each business has a very good business model and individually would be attractive businesses.  But for some reason, the management of this company (and the company as a whole) seem to be continuously going backwards.  Eventually the quality of the underlying businesses will show through in the EPS and DPS of the group as a whole, wont it?


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## Noddy (10 January 2011)

Hastie has formed a solid base in the 90 - 95 c region, an all time low for the company.
Maybe due for a bit of a leg up now that it has resolved it's debt issues for the moment.
Chart looks good after the price has formed a double bottom recently, and has started to ease upwards, albeit slowly.


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## skc (10 January 2011)

Noddy said:


> Hastie has formed a solid base in the 90 - 95 c region, an all time low for the company.
> Maybe due for a bit of a leg up now that it has resolved it's debt issues for the moment.
> Chart looks good after the price has formed a double bottom recently, and has started to ease upwards, albeit slowly.




Yes awesome looking chart indeed... or just bullish bias?





Fundamentally... recent bank negotiation to relax some debt convenants until 31 March only. This may be an indication that HST's problems are short term (if you are optimistic sort of person), or that the banks are giving them only a very short leash so they can take another review soon.

Actual result is due late Feb with possible update before that. I would think if they have turned things around, there will be plenty of time to buy after the announcements and before the price moves too far north... imho.


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## Noddy (10 January 2011)

Hello skc

Thank you for your response.
Interested in the chart you have posted on the thread as there is no identifying info on it. Can't relate it to the HST chart.
Must be missing something.


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## tech/a (10 January 2011)

Noddy said:


> Hello skc
> 
> Thank you for your response.
> Interested in the chart you have posted on the thread as there is no identifying info on it. Can't relate it to the HST chart.
> Must be missing something.




Because its not HST chart.
This is HST chart.
	

		
			
		

		
	



One for the bottom pickers.


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## skc (11 January 2011)

Noddy said:


> Hello skc
> 
> Thank you for your response.
> Interested in the chart you have posted on the thread as there is no identifying info on it. Can't relate it to the HST chart.
> Must be missing something.






tech/a said:


> Because its not HST chart.
> This is HST chart.
> One for the bottom pickers.




LOL.

That's the HST weekly chart turned upside down!

If my upside-down chart looked like breaking up then perhaps there is an upward bias in one's reading of the actual HST chart.


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## sptrawler (17 January 2011)

It is the same old story Australian company doing well, get taken out to dinner by U.S or U.K company get fed a load of $h!!!!!!t and end up buying a crock of it. 
You would think they would wake up U.K companies and U.S companies don't sell unless it's a lemon. Just look at B.H.P attempt to buy decent overseas company. 
We are the only country that can't wait to get rid of our valuable assets.
Just look at Oz minerals, they were prepared to offload everything for a pittance until the Government said no, then they ended up falling on their feet. It wasn't good management it was just pure luck.
I just hope management can trim costs and overheads and cull loss making divisions. Things don't appear to be getting better an upturn may be awhile comming.
I hold them and I am worried. No smiley faces here


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## skc (17 March 2011)

Cap raising coming up. Looks like a relatively large one. So the chart will probably break to the downside.



> Macquarie-advised Hastie is likely to launch an entitlement issue priced at a discount of more than 15 per cent to the stock's last close of 92.5c.
> 
> The issue will raise almost half the company's current market capitalisation. Hastie and its advisers have been trying for a month to nut out details of the raising that will help reduce debt.




http://www.theaustralian.com.au/bus...-capital-markets/story-e6frg8zx-1226022823374


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## skc (12 April 2011)

What a mighty thump today! Down 70% after trading resumed.

Personally I think that's an over-reaction. This company has revenue of $2.5B in revenue and a market cap of ~$70m. This is just about priced at liquidation...

I think someone will take them over if share price stay this low for much longer.


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## kingkev (12 April 2011)

massive correction today...........the downgrades continue and now a bit of a standoff.

Agree, this company could be in someones sights as a takeover target because the slides continue.  The reaction today is viscious and hopefully it is a bit of an over reaction


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## skyQuake (12 April 2011)

skc said:


> What a mighty thump today! Down 70% after trading resumed.
> 
> Personally I think that's an over-reaction. This company has revenue of $2.5B in revenue and a market cap of ~$70m. This is just about priced at liquidation...
> 
> I think someone will take them over if share price stay this low for much longer.




Breaching debt covenants too. Predators would wait for a fire sale when banks are forced to move in imo


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## skc (12 April 2011)

skyQuake said:


> Breaching debt covenants too. Predators would wait for a fire sale when banks are forced to move in imo




They have a 3? Month standstill I think. If PGA and NMS can survive I think these guys have a business that has a chance to turnaround. 

I hold a tiny position as of today just to get into any future cap raising.


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## sptrawler (12 April 2011)

skc said:


> What a mighty thump today! Down 70% after trading resumed.
> 
> Personally I think that's an over-reaction. This company has revenue of $2.5B in revenue and a market cap of ~$70m. This is just about priced at liquidation...
> 
> I think someone will take them over if share price stay this low for much longer.




It all depends on the margins on the work in hand and how well the tender costing was done. I am so fed up with everyone saying how well Australia is going. Take out the miners getting record prices then see how well Australia is going.


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## poppytom (20 April 2011)

My first attempt at this - so hope I get it right.

Of the numerous stocks that I hold, HST is the only DOG - and has caught me by surprise. One thought to bale out around a dollar, for no obvious reason it seemed, other than the price going backwards. Then the company calls for a trading halt and subsequent debacle is now history. Management seems to be an expert in Spin and really should be taken to task, or the market has over-reacted. There seemed to be a strong glimmer of hope from all that I have read, but but perhaps I am being naieve?

Has anybody got a real clue?

Cheers - PoppyTom


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## sptrawler (20 April 2011)

Hello poppytom. Great first post, HST your only dog, look forward to your further posts. LOL


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## So_Cynical (20 April 2011)

poppytom said:


> My first attempt at this - so hope I get it right.
> 
> Of the numerous stocks that I hold, HST is the only DOG - and has caught me by surprise. One thought to bale out around a dollar, for no obvious reason it seemed, other than the price going backwards. Then the company calls for a trading halt and subsequent debacle is now history. Management seems to be an expert in Spin and really should be taken to task, or the market has over-reacted. There seemed to be a strong glimmer of hope from all that I have read, but but perhaps I am being naieve?
> 
> ...




Ok so its now clear that you paid too much for your HST shares, assuming you brought in the first place cos you liked the business im wondering will you take this opportunity to average down? buying the same size parcel of shares will lower your average price to about 40 or 50 CPS? 

After-all you didn't sell thru the SP slide so were either in complete denial or wanted to hold :dunno: anyway to average down or not? bite the bullet and sell or bite the bullet and buy. :dunno:

This is why i only buy stocks that im willing to keep on buying.


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## sptrawler (20 April 2011)

So_Cynical said:


> Ok so its now clear that you paid too much for your HST shares, assuming you brought in the first place cos you liked the business im wondering will you take this opportunity to average down? buying the same size parcel of shares will lower your average price to about 40 or 50 CPS?
> 
> After-all you didn't sell thru the SP slide so were either in complete denial or wanted to hold :dunno: anyway to average down or not? bite the bullet and sell or bite the bullet and buy. :dunno:
> 
> This is why i only buy stocks that im willing to keep on buying.




Great call So_Cynical if its worth keeping you should buy more, if it's not you should fff it off.


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## Country Lad (21 April 2011)

There was a slight increase on the 2 days after the announcement but then all was digested and it fell further over the next 4 days.  The market has made its assessment.

It is not logical that there will be any increase until they can prove the corner has been turned.  Buy more and average down?  Sorry that to me is up there as a critical rule never to do.  It is a dog until proved otherwise and that may very well be a fair while off. 

If it were me, I would sell and put the money into others going up, not leave it in something which is languishing and could do so for quite a while.

Cheers
CL


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## poppytom (21 April 2011)

Great to hear from you guys out there.
Yes I did buy to hold LT. I liked the actual business and the stock was recommended strongly, originally at higher prices, by a couple of what I consider to be reputable newsletters. My own analysis about 12 months ago, was compatible.
So, I did average down as suggested - but was about to pull the pin primarily due to gut instincts, when the trading halt was called.
Hastie management has been clever at talking the company and prospects up and at the same time presenting the financial information in a manner possibly hiding the inevitable truth. While I might be naieve, I don't see that as being ethical, or complying with due governance.
We are all to believe it seems that the plight of the business is purely due to external factors? I do know that many share-holders theatened to pull the bin and dump the stock in anger as trading recommenced - and apparently must have.
Does HST still have a business or not??? 
Cheers.


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## skc (21 April 2011)

poppytom said:


> Great to hear from you guys out there.
> Yes I did buy to hold LT. I liked the actual business and the stock was recommended strongly, originally at higher prices, by a couple of what I consider to be reputable newsletters. My own analysis about 12 months ago, was compatible.
> So, I did average down as suggested - but was about to pull the pin primarily due to gut instincts, when the trading halt was called.
> Hastie management has been clever at talking the company and prospects up and at the same time presenting the financial information in a manner possibly hiding the inevitable truth. While I might be naieve, I don't see that as being ethical, or complying with due governance.
> ...




There are so much contradictions in this post. You don't trust the management - you think they are un-ethical, yet you bought more?

The true situation is that HST has breached banking convenents. They have a 4 month life line. If they can't refinance the debt or raise equity, they are going belly up. 

Take a look at the share price chat of NMS and PGA and see what happened when companies need to raise capital when their lives depended on it. It doesn't matter if they have a business or not.

This is hardly a time to be brave and double up imo. And like country lad said, if they turn things around, there will be plenty of time to buy before the share price races ahead.


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## poppytom (21 April 2011)

Thanks for the update SKC.

I might have confused you in that I bought more shares while I thought management was sound, I averaged down and believed in the information being presented. I do that with any stock.
However, I was later about to sell the bulk of my HST shares and got caught out with the trading halt - which turned out to be painful.
That is when I had some doubts about the information being presented by management - and of course still do. Hope they can trade out but won't be buying any more unless picture is much brighter.

Cheers


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## skc (21 April 2011)

poppytom said:


> Thanks for the update SKC.
> 
> I might have confused you in that I bought more shares while I thought management was sound, I averaged down and believed in the information being presented. I do that with any stock.
> However, I was later about to sell the bulk of my HST shares and got caught out with the trading halt - which turned out to be painful.
> ...




I see I did think you bought after trading resumed...Good luck with the position.


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## So_Cynical (21 April 2011)

skc said:


> There are so much contradictions in this post. You don't trust the management - you think they are un-ethical, yet you bought more?
> 
> The true situation is that HST has breached banking convenents. They have a 4 month life line. If they can't refinance the debt or raise equity, they are going belly up.
> 
> ...




Your a pretty good judge of these things...so i would be interested to see your thoughts on just how much the SP would pop if they were able to refinance on good terms?

You would have to agree that the pop would be significant if the ann read well....a gutsy average down now may well turn a 60 or 70% loss into a significantly more palatable 30 or 40% loss after the ann?

Do nothing and the situation cant be improved apon, do something and there's significant potential....2 edged sword of course.


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## poppytom (21 April 2011)

Thanks SKC.

Good day in the market today - and apart from HST did well . Hope you guys did well too. You can't win them all, but maybe HST will recover in the LT - maybe.

Wishing you a Happy Easter break.


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## skc (22 April 2011)

So_Cynical said:


> Your a pretty good judge of these things...so i would be interested to see your thoughts on just how much the SP would pop if they were able to refinance on good terms?
> 
> You would have to agree that the pop would be significant if the ann read well....a gutsy average down now may well turn a 60 or 70% loss into a significantly more palatable 30 or 40% loss after the ann?
> 
> Do nothing and the situation cant be improved apon, do something and there's significant potential....2 edged sword of course.




If the market is really generous and price them as a going concern, 6x EBIT for enterprise value would be a starting point (since they are still highly leveraged). This year's EBIT of $50m was impacted by a lot of things that hopefully won't be repeated, so let's say they trunaround somewhat and achieve $60-70m EBIT. This brings EV to $360 to $420m, less debt ~$300m. So $60 to $120m of equity over 240m shares = 25 to 50c. It's big range but that's what happens when the company is teetering on bankruptcy - the equity value swings widely on small change in assumptions.

If they raise capital say $200m @ 20c a pop that's 1B new shares. The market might say OK, we can do 8x EBIT and this bring enterprise value to $480 to $560m. Debt is down to $100m, so equity value = $380 to $460m. But spread that over 1.24B shares and you get 31 to 37c. 

If in 3 years they recover their EBIT to $120m, then 60-70c (in the post cap raising scenario) is possible. Or if they somehow don't need the cap raising, then all the way back up to $1 is possible as if nothing happened. But that's like saying a patient who's yet to recover from a heart attack may run and win the New York marathron one day... not impoosible but you wouldn't bet too big on it.

If they are to survive the cap raising route is the most likely. 20c raising price is probably generous given where they are trading. I certainly wouldn't double down if I was a holder - you can throw more money in during the cap raising when that comes.


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## So_Cynical (22 April 2011)

skc said:


> If they are to survive the cap raising route is the most likely. 20c raising price is probably generous given where they are trading. I certainly wouldn't double down if I was a holder - you can throw more money in during the cap raising when that comes.




Its reasonably likely they will trade lower than the issue price anyway, after the record date or after the issue date, thinking about it a little they have to make sure there's a big take up of the offer so it will have to be discounted...if i was a holder i wouldn't be doubling down either, but i would get a few extra to bring my average price down a little...this has always worked for me before.


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## Country Lad (24 April 2011)

So_Cynical said:


> Your a pretty good judge of these things...so i would be interested to see your thoughts on just how much the SP would pop if they were able to refinance on good terms?
> 
> You would have to agree that the pop would be significant if the ann read well....a gutsy average down now may well turn a 60 or 70% loss into a significantly more palatable 30 or 40% loss after the ann?




There is nothing to suggest that HST will improve if they refinance, and if they have a capital raising, the SP should simply reduce with the dilution.

The market has spoken, HST is justifiably seen as a dud and it will be a turnaround in the way the business is managed that will improve the SP, not the fact they are borrowing more money.

Keep in mind that the price has been falling for at least a year.  The market has been assessing the performance and has marked it down.  The same way that the market has been assessing one of its peers and martking it up.

The fact that HST has been falling for a year and NFK, which is in exactly the same market, has been continually marked up over the same period should have told the HST shareholders something.  Share prices do not normally continually fall for no reason - the market was telling us something, and the people who sold were the ones listening.

Cheers
CL


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## So_Cynical (25 April 2011)

Country Lad said:


> There is nothing to suggest that HST will improve if they refinance, and if they have a capital raising, the SP should simply reduce with the dilution.
> 
> The market has spoken, HST is justifiably seen as a dud and it will be a turnaround in the way the business is managed that will improve the SP, not the fact they are borrowing more money.
> 
> ...




You wouldn't be a trend follower by any chance...would you. 

Personally i don't take to seriously what the market is telling the share holders, im much more interested in what the market is telling me, i have been very successful buying stocks with a declining SP...and im reasonable confident there's money to be made in HST however ill leave it to the more risk tolerant than i.

GL with the trend following.


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## Country Lad (25 April 2011)

So_Cynical said:


> You wouldn't be a trend follower by any chance...would you.




Nope, not at all, just pay a lot of attention to the market action. 

Cheers
CL


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## hangseng (27 April 2011)

So disappointing to see this happen.

I was once a supporter and holder in my SMSF for the divs and potential CG. I sold Sept last year at a small CG to place all funds into PEN. I had fears over the rising debt levels, despite the excellent work in hand. I did not think this would happen though.

However if I have learnt nothing else it has been to protect my capital at all costs.

I only once held on to a stock that just kept going down and once even bought a another stock (a falling knife) believing the market had oversold the stock. Best thing I finally did on the former was to let it go, take the hit (a big one) and place what I had left into ST trades to build back up. That was a different stock to HST (at least they have a glimmer of hope), the one I had was a dog (CVI) with lying management HST is not that IMO.

My falling knife trade resulted in a loss. Good luck to anyone buying HST now, a brave move that may pay off handsomely if you are right.

I am just not sure in the current financial climate financiers are going to show much mercy. HST will have to prove up or I believe they will be cut off at the knees. If the US and world markets do what some are predicting HST will fall (if not fail completely).

Risk level is simply way to high with HST now IMO.

If they actually manage to turn the company around it may come out the other side a much stronger business. Then and only then would I look at HST again...Until then I only watch with interest from a distance unexposed.


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## poppytom (28 April 2011)

I watched my holding fall from an average of about $1.10 to .18 this morning. I had got out around .25 overall, so that is my loss and may have to try and make up with some ST trades.
HST may have some LT hope, but not in my book if management chooses to believe that all of their woes are due to external factors. Being new at this, what is IMO - it's probably fairly obvious.
Cheers all.
https://www.aussiestockforums.com/forums/images/icons/icon8.gif
Angry


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## poppytom (28 April 2011)

I think I might have got it - (IMO) - in my opinion  ??

I was looking for some technical term if so - and not the obvious.


Cheers


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## sptrawler (28 April 2011)

A lot of us in the same boat, they shouldn't have bought Rotar at the top of the market, but U.S and U.K companies are experts at "rope a dope". 
Given the problems with debt a lot hinges on very astute tendering, if they stuff up a tender just to get the job they are in the $..............t


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## poppytom (4 May 2011)

Volumes are up and the price is slowly climbing, against market trends. I assume that somebody knows something or is it just speculators out there hoping for a major windfall if the company recovers? I can see nothing of any note put out by the company recently, nor have I read anything else. Even if there is a turn-around I suspect it will be a long slow haul back up - maybe I am wrong.
Has anybody got a clue on the above?
Cheers.


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## kingkev (9 June 2011)

Big falls today.  Is it worth getting in at these lows or this going to continue south.  Restructuring of their debt I thought would have seen the sp move the other way

any thoughts


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## TheAbyss (9 June 2011)

kingkev said:


> Big falls today.  Is it worth getting in at these lows or this going to continue south.  Restructuring of their debt I thought would have seen the sp move the other way
> 
> any thoughts




Yesterdays announcement has the answer to your question imo.

Major dilution at a heavily discounted SP will be the result of yesterdays market release so holders/traders bailing out before an announcement regarding a SPP and its assoiated dilution at a heavy discount.

Excerpt from yesterdays announcement below.

The restructured facilities, which mature in FY2013 FY2014, are conditional upon, among other things, Hastie Group paying down a material amount of bank debt from the *proceeds of an equity recapitalisation*.


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## kingkev (9 June 2011)

SP dillution appears likely but I think that's a short term thing.  With Frigrite having problems there is a possibilty that many of their contracts will be picked up by Hastings.

I think it is rather undervalued and 15 or 16c looks like a good buy for a longish term hold


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## Mayfair (14 June 2011)

I am holding onto my HST shares. (Not advice. Do Your Own Research)

My position: Initially bought in around $0.19, my cost basis is now around 0.18, I am goingLong,. 


Firstly: The company has massive support from the big banks. CBA, in May became a major shareholder and re-increased their position.  CBA now have approximately 6.9% of HST which they purchased at market for $0.25 avg price approx with a hefty allocation of the shares allotted to colonial first state and a decent chunk going to Realindex.
Secondly: The equity raising details have been announced and is going forward with Lazard as cornerstone investor with insurance by UBS AG as well as Macquarie. 
Also: Lazard are appointing a board member, and the input of Lazard combined with UBS AG and Macquarie advice should not be underestimated in the future profit margins of HST.  

I'm: Holding with a view to accepting entitlement and increasing position. Simple Longcenomics


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## octain (25 June 2011)

Hi guys,
I have put a bit of time in researching this stock rather then post it all here, I have made a blog entry for it. Would be interested in your opinions relating to my thoughts. Blog can be read at https://www.aussiestockforums.com/forums/entry.php?b=887


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## kingkev (25 June 2011)

I thought that we would of already seen some upward movement in the sp but that might now only occur later in the year.  I bought in at 17c and will get my share of the 14c issue and HOLD

Holding for 12 months on this unless further company degradation


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## skc (25 June 2011)

skc said:


> If the market is really generous and price them as a going concern, 6x EBIT for enterprise value would be a starting point (since they are still highly leveraged). This year's EBIT of $50m was impacted by a lot of things that hopefully won't be repeated, so let's say they trunaround somewhat and achieve $60-70m EBIT. This brings EV to $360 to $420m, less debt ~$300m. So $60 to $120m of equity over 240m shares = 25 to 50c. It's big range but that's what happens when the company is teetering on bankruptcy - the equity value swings widely on small change in assumptions.
> 
> If they raise capital say $200m @ 20c a pop that's 1B new shares. The market might say OK, we can do 8x EBIT and this bring enterprise value to $480 to $560m. Debt is down to $100m, so equity value = $380 to $460m. But spread that over 1.24B shares and you get 31 to 37c.
> 
> ...




They raised less money at a lower price than my guesstimates...

Post-capital raising and assuming there is full uptake of the SPP, they will have ~1,535m shares on issue and $140m debt. Management is forecasting $58m EBIT for FY12. At 8x EBIT, share price is worth ~ ((8 x $58)-$140)/1,535m = 21c. Discount it at 20% you are looking at ~17c. Another way of looking at it, at 14c they are trading at 6x FY12 EBIT.

The directly comparable NFK is only trading at 6.5x EBIT for FY10. On that note, NFK is probably a lower risk proposition for exposure to the sector. However, HST's EBIT is based on 3% margin, while NFK is operating on 3.5%... so you can argue that HST's EBIT has slightly better upside.


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## kingkev (25 June 2011)

I wonder if Comm Bank would have pumped so much into this if they did the same calculation or do they see things very different to us.


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## skc (25 June 2011)

kingkev said:


> I wonder if Comm Bank would have pumped so much into this if they did the same calculation or do they see things very different to us.




The upside in HST lies in increasing margin (they historically enjoy ~5%) and increasing earning multiples (Well the market is not in generous mood these days). I am sure 10x EBIT would not be a stretch in a bull market. Personally I think NFK @ 6.5x is quite cheap.

Change those 2 input variables and you can easily price an upside target of 35c+. Those who are bullish on the share price recovery is not without reason but are certainly more optimistic than others.


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## Country Lad (26 June 2011)

skc said:


> The upside in HST lies in increasing margin (they historically enjoy ~5%) and increasing earning multiples (Well the market is not in generous mood these days). I am sure 10x EBIT would not be a stretch in a bull market. Personally I think NFK @ 6.5x is quite cheap.




Agree with NFK looking cheap but unfortunately the market and I have a different view at the moment.  I think that HST will have some difficulty in achieving their traditional EBIT margin in the short term from the current 2.5%. They still have some low margin work in hand and in the order book.  NFK has managed the downturn better with a lower margin drop from 4% to 3.5% and at the same time increasing revenue by 19%.  I think they will be quite happy to stay at the 3.5% while increasing the turnover at the expense of HST.

Because of my background I have a far greater interest in what will be an interesting battle in the marketplace than what happens to the share price.  With HST reputation being a bit tarnished and needing to get the margin up compared to NFK progressively increasing their turnover possibly at the expense of HST so able to put up with a lower margin.  

If NFK are aggressive enough and HST stumble a bit, then HST could be in trouble.  Conversely, HST will know NFK's strategy, has made serious changes to management and staff, tightened controls and know they need to get it right every time.  It will be an interesting battle to follow.

HST had taken their eye off the ball but should be able to turn it around.  I suspect the turnaround will not take effect for another half year. It could take only one large project at a strong margin to do that.

Cheers
Country Lad


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## kingkev (27 June 2011)

Getting in lower than the sp offer is on the cards now as sellers are offloading today


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## skc (12 April 2012)

Another downgrade. These guys are basically still in business because of the drip from the banks.

EBIT ~$10-15m before re-structuring cost of $10m they barely have enough money to pay the interest on their $150m debt pile.

Market cap today is ~$25m. They were worth a couple $B back in 2008.

I can't see them surviving.. may be a trade sale for bits and pieces if there are any hard assets...


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## lucifuge (13 April 2012)

uh oh...........trading haltski


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## MAKING MUSTARD (26 April 2012)

Hasties Austral refrigeration is on the block ....

Buyer possibly Hills Phoneix for the case making division
and Woolworths for the service arm in a mirror of the Coles/CityFM joint venture


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## skc (25 May 2012)

skc said:


> I can't see them surviving.. may be a trade sale for bits and pieces if there are any hard assets...




Accounting irregularities... $20m charge to profit this year.

That's got to kill it now - if there was any doubt before.


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## skc (28 May 2012)

skc said:


> Accounting irregularities... $20m charge to profit this year.
> 
> That's got to kill it now - if there was any doubt before.




RIP, Hastie.

All the best to the employees in these difficult times. 

http://www.smh.com.au/business/hasties-collapse-to-hit-banks-20120527-1zd1a.html


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