The trend is still down for the shorter term that is for sure. How many fundies are still buying as the price goes lower and lower??
Will $4 act as technical support level?
So many questions, so many different answers
To get to 3.75 it also has to pass a significant level (low) on the weekly chart of 3.95 (support ?).
Massive offload at the closing auction, took the 3.95 out easily.
It's now back at Nov 2004 prices !
Nearly 600k worth of shares dumped in closing auction. Lets hope someone is just panicking and its not a case of someone knowing more than the market
You could hope it was the same guy who was playing RIO today at 12:25:grenade:
The additional costs that the Bank considers are appropriate to include in the reasonable cost of acceptance are limited to those specified in paragraphs (a) to (e) below, where those additional costs can be separately identified and costed as a direct cost of card acceptance. The additional costs include and are limited to:
Merchants' own costs related to card acceptance. This cost category includes, and is limited to: the merchant's costs of purchasing and maintaining their own card acceptance infrastructure; scheme fees levied on the merchant by the scheme; and line rental and communications charges directly related to the use of payment card terminals.[2]
In cases, including some business models in the taxi industry, where the ‘merchant’ is a payment services provider that charges fees directly to the end-user, the reasonable cost of card acceptance would also include some allowance for the capital cost of the provider. In the case of the taxi industry, the Bank notes that the 2012 draft report of the Taxi Industry Inquiry in Victoria suggested regulating service fees so they did not exceed the resource cost of providing electronic payment services – i.e. excluding financial flows between processors, operators and networks – and found no evidence that this should exceed 5 per cent of transaction value.
Footnote 2
So it reads to me that taxis should also falls under the "reasonable cost of acceptance" umbrella, regardless of how the charge is broken down between surcharge and other costs.
Have you done any work on earnings models if the 5% cap comes in? I haven't had a look in a while, but I remember calculating about 25% earnings loss.The next bit is what happens if Victoria mandates a price-cap of 5%. CAB won't look as cheap then even at these levels. I could easily see NSW following, they seem to just be waiting for Victoria.
Couldn't help myself. I bought a few thousand shares at 3.64. What is not to like about a 9.6% fully franked dividend of a company with good financials. Looking at the technicals, breaking the $4 looks bad, yet I wont be surprised to see a large reversal sometime soon.
As the company release basically stated nothing materially wrong, it would be a very bad look for directors to announce something bad next week, hence downside should be limited.
Have you done any work on earnings models if the 5% cap comes in? I haven't had a look in a while, but I remember calculating about 25% earnings loss.
Which, means it is still on a P/E of 10. That isn't bad for a quality business.
The RBA‟s announcement is at odds with Cabcharge's view that its
business "applies fees on financial services rather than a surcharge on the
underlying transaction". In our view the announcement provides a clear
reference that taxis are caught under the Payment Systems Regulation Act.
We suspect this is the ammunition schemes such as Mastercard and Visa
have been waiting for in order to begin an effective arbitration process with
the taxi industry.
Cabcharge‟s business model is now under attack on a number of fronts.
Regulatory overhangs are the key near term concern with the VIC
Government‟s response to the Fels Taxi Inquiry due out mid-December. CDC
is facing significant bus contract re-sign risk in CY13 and technology change
is also posing a threat to traditional taxi networks and payment processing
terminals. The stock has fallen significantly from its recent highs, however,
with so much uncertainty we expect this deterioration to continue. Maintain
Underperform.
Have you done any work on earnings models if the 5% cap comes in? I haven't had a look in a while, but I remember calculating about 25% earnings loss.
Which, means it is still on a P/E of 10. That isn't bad for a quality business.
Is the whole $90 mil included, though? How broad is taxi service fee income?P.46 of last accounts... Taxi service fee income = $89.55m.
So if you half that, I think it's more like 25% (~$40m) revenue loss. How much falls straight to the bottom line? I don't see much reduction in associated costs. Considering the NPAT was ~$60m, the earnings impact is massive if it comes to bear.
So many conflicting views out there on what is concluded.
What are the potential earnings impacts for Cabcharge? We have
revisited our “worst-case” scenario analysis detailed in our June 2012 report
titled “Game Changer?” assuming a reduction in surcharges become a reality
for third party card processing (estimated EBITDA reduced by ~$20m or 30%
impact to EPS). We caveat this analysis by saying the lack of adequate
information available means any impact on CAB‟s earnings is purely
speculative at this stage and should be used as a basis for discussion only. It
is also important to keep in mind that CAB‟s peers are likely to be impacted by
any changes, resulting in potentially positive market share gains.
Earnings and target price revision
We believe the stock will continue to trade at a significant discount to our
valuation given the uncertainty. Reduced price target to $3 ($4.50 previously).
Price catalyst
12-month price target: A$3.00 based on a Sum of Parts methodology.
Catalyst: VIC Government response to Allan Fels Taxi Inquiry, December
2012.
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