A2B - A2B Australia

[ROE]

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.

That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
unless you can break down how much it make from transaction payment no one really know the impact
if there is any...

I think it will have some material impact but my feeling is the market over-reacting as I seen in dozen of case
of business I average down so I continue on this average down path

$60m NPAT doesn't not derive from $89.55m taxi services, it's from 192m revenue

 

[Ves]

That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
unless you can break down how much it make from transaction payment no one really know the impact
if there is any...

Thanks, I thought this was the case. I will have another look over the weekend in more detail.

 

[skc]

That including everything to do with taxi, insurance business, driver training, network fees etc..etc..
unless you can break down how much it make from transaction payment no one really know the impact
if there is any...

I think it will have some material impact but my feeling is the market over-reacting as I seen in dozen of case
of business I average down so I continue on this average down path

$60m NPAT doesn't not derive from $89.55m taxi services, it's from 192m revenue

Yes you are quite right... There's not enough information to calculate the impact accurately. I simply took what data point was there and make the most pessimistic calculation.

Total revenue $192m. Cost is whatever it is. Profit = Revenue - Cost. Reduce revenue by $40m (as being the worst case scenario) and hold the costs constant, you get a substantial (and worst case) impact on profits.

If I use that approach and still find CAB to be undervalued then it makes a good buy. Otherwise it's not yet a calculated good risk/reward. It's an adaptation of the "limit state design principle" from engineering.

 

[brty]

In 2007, The company had a cashflow of 28c/share and dividend of 30c/share. The share price was between $9.50 at the low point and $14 for the high. Interest rates were higher than today.
In 2012 the company had a cashflow of 58c/share and a dividend of 35c/share. If they were to lose 30% of cashflow it would still be nearly 50% above the 2007 level. A share price of 1/3 the 2007 level seems a little ridiculous.

All the bearish talk by some posters goes along with what is currently in the media, yet there is nothing materially different to what was known 3 weeks ago.

On the technical note it has lost nearly 40% of value from the close on 31st Oct, the move down has had several gaps, including the gap down today, my interpretation an exhaustion gap. Volume spiked to the largest in months, pretty much equal to the highest daily volume of the past year, my opinion, stopping volume. Considering most of the days trading was above the open price and it closed towards the upper end of the daily range, there is a high probability today was the low.
IF Monday opens higher it is also likely there will be a quick retracement of this last move, while today's action will look like an island reversal.
All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.

 

[craft]

Obviously make of the analyst report what you want. I don't take them as gospel but they are good for reference and to add a bit of colour to the discussion. I can PM you the full report if you want.

Hi McLovin

Any chance you can shoot me the report.

You seem to have good access to broker reports - is that via work, subscription or ......

Cheers

 

[McLovin]

PM on the way craft.

 

[ROE]

All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.

I like this type of risk, a rock solid business facing a uncertainty and the market discard it like junk.
There are a few possibilities of upside to all these gloomy news.

I have to wait probably around 18-24 months months to see if that is the case.

in two years time it may prove today is the best day to catch a taxi

 

[prawn_86]

I averaged down a bit early at around 4.50 but below $4 seems crazy to me and after having run my valuations agin im tempted to buy more Monday, this will be my biggest holding by far however if i do that.

No risk no reward i guess

 

[craft]

PM on the way craft.

Thanks

12-month price target: A$3.00 based on Sum of Parts methodology.

Sweet.....

There’s a lot of “can’t see the forest for the trees” around Cabcharge at the moment. 20 Years from now regulators will still be trying to contain Cabcharge due to the strength of their competitive position in the taxi industry. Even if the surcharge gets capped or the enquiries come up with some other punitave measure, they can just modify their revenue model – the competitive position enabling profit extraction really won’t be impacted that much.

Now if Maquarie would just lower their target to $2.00 following a bit more uncertainty from the Fels Taxi Inquiry then I might have to buy them a Christmas present.

 

[prawn_86]

PM on the way craft.

I'd love a squiz too please mate

 

[brty]

Was having a chat with the minister of transport (Vic) at lunchtime today, completely forgot to ask him anything about the taxi enquiry, mind you even if we had discussed it, it would be inappropriate for me to have stated anything about it.

However, I should remind everyone that the current Victorian government is a business friendly one and that capping free enterprise is not on their agenda. Now if there was a left wing labour government, then things could be different.
When was the last time a right wing government proceeded with recommendations from a commission that were anti free enterprise?
May I also remind everyone that the same set of recomendations include a 20% increase in fares at peak times to allow lower fares at other times. I don't think that recommendation will harm Cabcharge.

 

[prawn_86]

On the technical note it has lost nearly 40% of value from the close on 31st Oct, the move down has had several gaps, including the gap down today, my interpretation an exhaustion gap. Volume spiked to the largest in months, pretty much equal to the highest daily volume of the past year, my opinion, stopping volume. Considering most of the days trading was above the open price and it closed towards the upper end of the daily range, there is a high probability today was the low.
IF Monday opens higher it is also likely there will be a quick retracement of this last move, while today's action will look like an island reversal.
All share trading and ownership is about risk. There is little reward where there is no risk. However there are few occasions when opportunity stares you in the face and most freeze. I believe today offered one of those rare opportunities.

Looks like the first half of this analysis is playing out. Volumes yesterday and today much lower than Friday and the price creeping back up towards the $4 mark.

Personally i have bought more and this is my biggest holding now, with an average price slightly over $4

 

[clinta44]

Some bed time reading about the legislative issues surrounding Cabcharge.

You can read the draft report from the VIC taxi inquiry and its recommendations, here - http://www.taxiindustryinquiry.vic.gov.au/

as well as the Variation to the surcharging standards, here - http://www.rba.gov.au/payments-syst.../201206-var-surcharging-stnds-fin-ref-ris.pdf

 

[TikoMike]

Some bed time reading about the legislative issues surrounding Cabcharge.

You can read the draft report from the VIC taxi inquiry and its recommendations, here - http://www.taxiindustryinquiry.vic.gov.au/

as well as the Variation to the surcharging standards, here - http://www.rba.gov.au/payments-syst.../201206-var-surcharging-stnds-fin-ref-ris.pdf

Old news. Reset the last few pages and you'll see it has been discussed.

On another topic, seems to be a lot of the major shareholders on a November buying frenzy.

 

[Ves]

Reg Kermode. Another good AGM address. Some telling comments.

I topped up some more when the market opened this morning.

 

[TikoMike]

Reg Kermode. Another good AGM address. Some telling comments.

I topped up some more when the market opened this morning.

The part where he talks about people accusing him of being recluse made me laugh.

Seems like he's also hinting, in a subtle way, at a few things in regards to all the media bullcrap and the outcome from it.

 

[ROE]

The guy doesnt mess around he goes straight to the point

CAB been charging 10% since before the surcharge introduce in 2003, so how can it fall under the surcharge law as this is their business practise way before the surcharge introduction...

so I reckon they can take this stuff to court and win as this legislation seems to design to limit its earning ability which I think unconstitutional.

 

[McLovin]

so I reckon they can take this stuff to court and win as this legislation seems to design to limit its earning ability which I think unconstitutional.

It's the vibe of the thing...

http://www.youtube.com/watch?v=ssukL9a99JA

Unfortunately, regulating prices is not unconstitutional.

 

[ROE]

I call on the Mabo the right of CAB to charge finance fee of 10%

 

[clinta44]

It was an odd AGM that's for sure, but I think Reg seems like a knob of the highest order!

He still fails to mention he paid way over the odds for CitiFleet and that he's been heavily selling for years, just in the last two years he has sold 681,928 shares!

He is constantly talking up how good the company is yet is heavily selling, I'm starting to wonder who is the "Pigeon" and who is the "statue"?

But then to to top it off, they get a second strike from there shareholders over remuneration! But CAB actually have one of the better ones going around, There is no LTI plan and they have not been paid any STI for 2 fin years!