# RCY - Rivercity Motorway Group



## 26 Broadway (18 October 2006)

Floated mid year at .50c (with .50c due in 2008 I think) and guaranteed .06c dividend return but is worth only .395c at the moment.

Anyone heard anything about this one ? Good or bad, I'll listen - promise !!


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## Kieran (22 May 2007)

*Re: RCYCA - RiverCity*

I'm also interested in this one. Saw it in the Herald Sun as a BUY, would be pretty ****ty if I bought it at float and still had to pay the 50c in mid 2008 looking at the current price of .395!


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## Busyboy50 (5 August 2009)

*Re: RCYCA - RiverCity*

Surely this is the pick of Brisbane tollway stocks. They have recently finished tunneling and ( I think ) all their bridges. The high risk financil stuff is covered. And they ahead of schedule. It's sitting around 16c at moment, with no return of capital ( a good idea - thanks Transurban ), but anyone who's had the dubious pleasure of being stuck in traffic along the Brisbane River, most times of day will know what a good project this is. Should be open to traffic in about a years time, if their Newsletter is to be believed... Cheers


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## salpal (9 January 2010)

With news of the tunnels opening date not far of this stock may move further north, how ever it has had a very good run of late. Does anybody have an idea where this stock could go


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## Busyboy50 (13 January 2010)

RCY has had a good run this past week.... personally think it just coming back to where it should be. Comparable type of stock is ConnectEast CEU, but CEU has more debt, is a ring road rather than thru city centre. RCY will be the only way to avoid the central Brisbane bottle-necks.....

RCY construction is ahead of program and costs on target, so would expect further rating back to to initial issue cost? :


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## skc (13 January 2010)

Busyboy50 said:


> RCY has had a good run this past week.... personally think it just coming back to where it should be. Comparable type of stock is ConnectEast CEU, but CEU has more debt, is a ring road rather than thru city centre. RCY will be the only way to avoid the central Brisbane bottle-necks.....
> 
> RCY construction is ahead of program and costs on target, so would expect further rating back to to initial issue cost? :




Construction may have gone well but the traffic forecast and ramp up of recent toll roads have been way off.

But more importantly, the corporate balance sheet of RCY was constructed in the yesteryears of easy credit... that factor alone means the share equity will really struggle to get to the initial issue price, no matter how good the traffic is.


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## Ken Kwong (23 July 2010)

No Offence ..... If the non-executive director of RCY is selling 250,000 shares @4.1 cents on market trade ( total amount approximately $10K +), you can imagine the sort of confidence the company executive is beholding for the company.  
How could someone in such a position act in such an irrational manner without considering the type of signal that would be sending out to all shareholders, both existing and potential investors??
Based on the 2008 financial report, non executive director receives $70k base salary.  The sales proceeds are only $10k+, one would have thought at least the non-executive director would hold on and at best, sacrifice the $10+plus and shows a bit of support for all investors.  
I think, he should be removed as non-executive director.  

What are your views?


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## prawn_86 (23 July 2010)

Ken Kwong said:


> I think, he should be removed as non-executive director.
> 
> What are your views?




Thats a bit harsh isn't it?

What if he had sudden family expenses he could not pay. Perhas he wanted a new car, or perhaps someone in his family got sick. 10k is 14% of his wage, so it's not an amount to be sneezed at, especially if it is his only wage (doubt it)...


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## oldblue (23 July 2010)

I can see K K's point although it's not really a sackable offence!

But a director selling shares when the SP is so weak is a signal to other shareholders to seriously question their own positions. Coming at this stage it's bound to dent confidence in the company a bit further.

Disc: Not holding.


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## jonojpsg (23 July 2010)

prawn_86 said:


> Thats a bit harsh isn't it?
> 
> What if he had sudden family expenses he could not pay. Perhas he wanted a new car, or perhaps someone in his family got sick. 10k is 14% of his wage, so it's not an amount to be sneezed at, *especially if it is his only wage (doubt it)*...




Herein lies the point Prawn - how many non-exec directors are only on one board or do not have any other source of income???  It certainly wouldn't be a full-time job that's for sure!


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## Ken Kwong (23 July 2010)

I, like some of the investors, have been sucked into buying this stock since IPO.  Most of us would have paid $1 for some of shares we are still holding and less for some shares as the broker recommends COST AVERAGING.  So it hurts to see someone within the company selling the shares at 4.1cents while most shareholders like me still "holding the candles" so to say.
The non executive directors are appointed to help the investors to create values for the shareholders.  Morally, I do not think it's fair to receive a remuneration from the company and yet personally selling the company shares while you are holding an important posisition to help the shareholders to manage the company.  I like to hear from those who are still holding RCY shares and are down significantly from their original investments.


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## prawn_86 (23 July 2010)

It is however a free market with 'buyer beware' as the motto. Although i do disagree with planners recommending bad stocks.

As they say, dont invest money you cant afford to lose


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## Ken Kwong (23 July 2010)

*Re: RCYCA - RiverCity*



Busyboy50 said:


> Surely this is the pick of Brisbane tollway stocks. They have recently finished tunneling and ( I think ) all their bridges. The high risk financil stuff is covered. And they ahead of schedule. It's sitting around 16c at moment, with no return of capital ( a good idea - thanks Transurban ), but anyone who's had the dubious pleasure of being stuck in traffic along the Brisbane River, most times of day will know what a good project this is. Should be open to traffic in about a years time, if their Newsletter is to be believed... Cheers




My friends told me that the RCY road passes through many rich suburbs around Brisbane, hence, I do not understand why many people up there still not willing to pay TOLLS???


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## sptrawler (24 July 2010)

The problem is K K, the tunnel has taken the pressure off some of the other roads. Unless the Government takes some of the financial pressure off RCY they are going to have trouble meeting their interest payments. The only shinning light is the Government will probably have to buy in as they are loosing a lot of credibility with the financial and investor sector. Queensland toll floats are starting to smell like $!!!t and unless it is turned around quickly punters won't have to taste it to know what they are being fed.


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## Ken Kwong (24 July 2010)

sptrawler said:


> The problem is K K, the tunnel has taken the pressure off some of the other roads. Unless the Government takes some of the financial pressure off RCY they are going to have trouble meeting their interest payments. The only shinning light is the Government will probably have to buy in as they are loosing a lot of credibility with the financial and investor sector. Queensland toll floats are starting to smell like $!!!t and unless it is turned around quickly punters won't have to taste it to know what they are being fed.




Do you think the Queensland Govt will work out a deal with RCY by increasing general council rates but force RCY to reduce tolls or make the road toll-free??? I understand that BrisConnect, another quoted company, is building a road leading to the Bribane Airport and it will link up with RCY.  Therefore, there may be a possibility that Macquarie Bank may structure some sort of INFRASTRUCTURE FUND to buy up RCY just before the road leading to the Airport is fully completed in 2011 or 2012???  
Personally, I do not think the Queensland Govt will let RCY go down the drain because it is its first Toll-Road and is the pride of the people in Queensland to ensure that it succeeds.  It will be a disaster if some foreign organisation comes in later and picks it up cheaply (maybe one Canadian Fund Manager) when it turns belly up.  Hope it will not happen.


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## nioka (24 July 2010)

Ken Kwong said:


> Personally, I do not think the Queensland Govt will let RCY go down the drain because it is its first Toll-Road
> .



If it is the first toll road then who has been collecting the toll on the Logan motorway all these years?. I thought it was the Qld government.


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## sptrawler (24 July 2010)

Well K K it is too late to get nervous now it is just a case of buckle yourself in and enjoy the ride. Like i said i think the government will have to jump in or else they will have their credibility at junk bond status. However i would say they are a bottom draw and forget for awhile share.
By the way I have a few`at an av cost  of 0.30c


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## skc (26 July 2010)

Ken Kwong said:


> My friends told me that the RCY road passes through many rich suburbs around Brisbane, hence, I do not understand why many people up there still not willing to pay TOLLS???




Look around at various toll roads in Australia and you will quickly see that strong traffic are only observed in toll roads that:

1. Connect betwen two points which are otherwise obstructed. Think Sydney harbour bridge and tunnel.

2. Connect between places where the travel times of the whole trip is reduced significantly. Think Sydney M4 vs the forever congested Paramatta road.

If you look at the Clem 7 tunnel, it is the only tolled cross river passage around Brisbane CBD, while there are 3/4 other free alternatives. This is not helped by the fact that Brisbane hasn't got a strong "toll-paying" culture / history. 

The tunnel connects between two inner suburbs and traffic is usually bad at either end of the tunnel outlet. So people don't really save much travel time with respect to their whole journey, unless they happen to just want to go from 1 end of the tunnel to the other.

Other toll roads that connect between nowhere and nowhere, and with free alternatives are the Cross City and Lane Cove tunnel. And you know how they both ended up...



Ken Kwong said:


> Do you think the Queensland Govt will work out a deal with RCY by increasing general council rates but force RCY to reduce tolls or make the road toll-free??? I understand that BrisConnect, another quoted company, is building a road leading to the Bribane Airport and it will link up with RCY.  Therefore, there may be a possibility that Macquarie Bank may structure some sort of INFRASTRUCTURE FUND to buy up RCY just before the road leading to the Airport is fully completed in 2011 or 2012???
> Personally, I do not think the Queensland Govt will let RCY go down the drain because it is its first Toll-Road and is the pride of the people in Queensland to ensure that it succeeds.  It will be a disaster if some foreign organisation comes in later and picks it up cheaply (maybe one Canadian Fund Manager) when it turns belly up.  Hope it will not happen.




Increasing council rate to reduce the toll?! I live in Brisbane and there I will lead the riot! Why should regular rate payers, many of whom don't drive or use the tunnel, pay for the failure of a private enterprise?! 

There is little doubt that RCY is headed to corporate heaven / graveyard at current activity level. Traffic picked up by ~35% (from ~22000 to ~30,000) after they cut the toll from $2.95 to $2.00. Which means their revenue is basically unchanged if not slightly lower. So that trick didn't really work unfortunately.

How much money do they have left and how many more months can they afford to pay the interest bill? And if QLD govn't was to step in, how much fresh equity will be needed and what dilution will they cost existing holders?

http://news.smh.com.au/breaking-new...oves-traffic-with-toll-cut-20100702-zsn3.html


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## drsmith (26 July 2010)

The toll reduction is only till Sept 30.

What traffic volume does after that date remains to be seen.


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## Ken Kwong (7 October 2010)

sptrawler said:


> Well K K it is too late to get nervous now it is just a case of buckle yourself in and enjoy the ride. Like i said i think the government will have to jump in or else they will have their credibility at junk bond status. However i would say they are a bottom draw and forget for awhile share.
> By the way I have a few`at an av cost  of 0.30c




Yes... you are right.  No point in "crying over spilt milk". Having said that, as a shareholder, I am a bit disappointed with the management.  They have seen what happened to "Sydney tunnel" and other disaster in some toll roads where the volume of traffics did not achieve expectation.  One would have thought that they would have some form of "contingency" surviving plan up their sleves to be activated (i.e what if situations).  Alhtough to promote traffic volumes may be its prime objective, they should have considered earlier other sources of revenue e.g advertising billboard by banks or macDonalds or Colts, or off road advertising near critical juncitons would at least help to generate additional revenue.  At today's market price of $0.013 (7th Oct 2010), the total market capitalisation is only about $14m.  The company could have arranged on-market buy-back at such price (with the money from suspended distribution) to reduce number of share scripts.  I also have CEU (toll road in Victoria). I remembered in earlier days, CEU almost headed towards similar fate with less than expected traffic volumes but it survived and NOW it is CASH POSITIVE.  Of course, the length of the toll road is different.  Anyway, hopefully, the company can still survice until the airport link (BCS) opens.  Good Luck!! to all RCY shareholders


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## skc (22 November 2010)

This is the cover page from the RCY AGM presentation... can anyone see what's wrong with this picture? (Answer below)





Overall the company is not doing so well. Harrdly enough revenue to cover operating expense, let alone interest. Monthly cash shortfall is $7.1m. They need a standstill arrangement by end of this year or it's good bye to equity holders and big chop for the debt holders The arrnagement (if granted) will give them 6 months until after airport link is open and see if traffic will improve. IMO, clinging on hope of the airport link to rescue is not realistic at all - if Brisbane motorists are not willing to pay a toll to cross the river, why would they be inclined to pay 2 tolls to use airport link AND the Clem7?

And let's put the traffic in perspective. Toll revenue last quarter was $4.4m. Op ex $8.5m and Interest $19.3m. This means revenue need to increase 6x just to breakeven! 

I am actually extremely surprised that there is still $10m equity value on the market. Even if they get the standstill they want surely the existing equity holders will be wiped out completely...







The answer to the picture question:

These cars are way too close to be actually moving together at speed. They also all carry some sort of a badge on the lower right corner of the windscreen. My guess is they are cars of employees asked to post for a photo. And that highlights the sad state of affairs - they can't just take a picture of the tunnel's usual operating condition for use as cover page...


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## Ken Kwong (23 November 2010)

Typical Queensland's project.  Who knows....one day,  the National Railway's fate may end up this way too!!!!......  No more confidence.


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## TheAbyss (24 February 2011)

And gone................
http://www.theaustralian.com.au/bus...s-to-call-in-ppb/story-e6frg97o-1226011510960


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## EddieRobinson (4 March 2011)

TheAbyss said:


> And gone................
> http://www.theaustralian.com.au/bus...s-to-call-in-ppb/story-e6frg97o-1226011510960




This week in Voluntary administration, As long as the directors don't get golden parachutes on the way down.


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## sptrawler (5 March 2011)

Really someone should go to gaol over the fraud and deception in the traffic flow forecasts put forward in the prospectus. I feel sorry for the mums and dads that entered the float at the recomendation of the Queensland government, what a disaster.


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## sptrawler (10 March 2011)

So I suppose now the tunnel gets sold to someone at a realistic price to traffic flows. The Mum and Dad investors just have to move on and by the way pay more taxes for the floods. 
But the tunnel is built and now someone can make money because they only have to pay what it is really worth and can get a R.O.E


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