CUP - Count Limited

[System]

Countplus Limited (CUP) is a leading professional services provider comprising 16 accounting firms, one financial planning firm and a financial advice dealer group.

http://www.countplus.com.au

 

[danbradster]

Re: CUP - Countplus

Ex-dividend on Monday, I topped up bigtime today. Hopefully it's the right move.

Any opinions on this share?

 

[skyQuake]

Re: CUP - Countplus

Ex-dividend on Monday, I topped up bigtime today. Hopefully it's the right move.

Any opinions on this share?

Why bother? stock is illiquid and divvie is less than 2%

 

[danbradster]

Re: CUP - Countplus

Why bother? stock is illiquid and divvie is less than 2%

The dividend is quarterly. $0.02 quarterly is $0.08 annually, from a $1.32 buy that is 6% fully franked. Plus they have had some recent tie-ins that are meant to be earnings accretive, which makes >$0.02 dividends in the future a possibility.

Or you mean why would I buy now rather than later, all for a measly 1.5% dividend? The franking makes it equivalent to 2.14%, I think. Buying today for $1.32 is like buying for $1.292 next week. Could I get it for $1.292 next week? Maybe, maybe not.

Looks like a pretty interesting company to hold. Hopefully it will be a consistent grower and consistent dividend payer, the average age of the businesses in the company is promising.

 

[skyQuake]

Re: CUP - Countplus

The dividend is quarterly. $0.02 quarterly is $0.08 annually, from a $1.32 buy that is 6% fully franked. Plus they have had some recent tie-ins that are meant to be earnings accretive, which makes >$0.02 dividends in the future a possibility.

Or you mean why would I buy now rather than later, all for a measly 1.5% dividend? The franking makes it equivalent to 2.14%, I think. Buying today for $1.32 is like buying for $1.292 next week. Could I get it for $1.292 next week? Maybe, maybe not.

Looks like a pretty interesting company to hold. Hopefully it will be a consistent grower and consistent dividend payer, the average age of the businesses in the company is promising.

Yup, I have it as around 6.5% yield. However your 6.5% doesnt come with capital guarantee like a good bank deposit.
If you're buying cause u like the co and did your homework, fair enough. However its a bit irresponsible to buy for the franked divvie given the low liquidity and swings in daily/weekly range.

 

[danbradster]

Re: CUP - Countplus

Yup, I have it as around 6.5% yield. However your 6.5% doesnt come with capital guarantee like a good bank deposit.
If you're buying cause u like the co and did your homework, fair enough. However its a bit irresponsible to buy for the franked divvie given the low liquidity and swings in daily/weekly range.

The franking adds 43% to the value of the dividend, it's a fair margin of safety. Plus there's potential for the business to grow, especially since they don't have 100% dividend payout ratio, so they are therefore investing the non-distributed cash in the business.

They are showing almost $0.12 EPS for the December half year, dividends would be $0.04 for the half year (33% dividend payout ratio). So the ~6.5% goes out as dividends (franked), plus another 13% back into the business. Seems like potential for capital growth alongside the franked dividends.

 

[ROE]

Re: CUP - Countplus

Interesting the founder out lay nearly a cool 1 mil to buy more stock on the market even with the recent run on the price - ....

 

[chops_a_must]

Re: CUP - Countplus

I've been in.

Great chart. Great yield.

Just not very liquid...

 

[ROE]

Re: CUP - Countplus

I've been in.

Great chart. Great yield.

Just not very liquid...

Yeah I been in it for a while crazy yield until recent run up but still good yield ...went ex-div this week too -
There must be more upside for Barry to outlay a cool 1 mil to buy on market....at $1.89 a pop

 

[prawn_86]

Re: CUP - Countplus

Yeah I been in it for a while crazy yield until recent run up but still good yield ...went ex-div this week too -
There must be more upside for Barry to outlay a cool 1 mil to buy on market....at $1.89 a pop

wow just looked at these guys very quickly cause of your post.

6.5% at current prices and extremely consistent, quarterly payments. How did these go under the radar for so long?

 

[VSntchr]

Re: CUP - Countplus

wow just looked at these guys very quickly cause of your post.

6.5% at current prices and extremely consistent, quarterly payments. How did these go under the radar for so long?

I had the same initial reaction.
But my concern with this company is the upcoming FOFA reforms.
I work for a big bank in wealth management and they are convinced that the reforms are going to squeeze the smaller players in this market.

Who knows whats going to happen, but this should be considered when determining the future earnings of related companies.

 

[prawn_86]

Re: CUP - Countplus

I had the same initial reaction.
But my concern with this company is the upcoming FOFA reforms.
I work for a big bank in wealth management and they are convinced that the reforms are going to squeeze the smaller players in this market.

Who knows whats going to happen, but this should be considered when determining the future earnings of related companies.

I'm only just starting out on my research, but with the brands and franchises they own i dunno if they would be classed as a smaller player. I dont know anything about the FOFA reforms either, but perhaps it would help them to secure other firms and bring them under their umbrella if it does get too much for small practices.

Cheers for your input

 

[McLovin]

Re: CUP - Countplus

I had the same initial reaction.
But my concern with this company is the upcoming FOFA reforms.
I work for a big bank in wealth management and they are convinced that the reforms are going to squeeze the smaller players in this market.

Who knows whats going to happen, but this should be considered when determining the future earnings of related companies.

The overwhelming majority of these guys revenue comes from accounting and tax work, not financial planning. It's about 80/20.

It would be nice if these guys broke down how much of their growth is acquisition v organic. They often seem to mention they are not a growth by acquistion type firm and want to extract organic growth but they keep making acquisitions. It's hard to imagine 10% growth in the accounting industry is sustainable without being acquisitive. I looked at them a while ago and that was the main issue I had with them.

 

[craft]

Re: CUP - Countplus

CBA owns nearly half of CUP via buying Count. They only moved on Count after Cup was spun off – their intentions would be worth considering.

1 Million is small change to Barry Lambert – he is way less invested in CUP than he was Count. I wouldn’t read too much into the ‘size’ of his purchase.

FOFA reforms will probably cause consolidation – Unfortunately there a pretty long list of consolidators who have paid a high price for paying high acquisition prices to be the consolidator. Some success stories too, question is how will the story play out for CUP? - I don't know - I don't have a position.

 

[Ves]

Re: CUP - Countplus

It might be me being silly again. But in the 2012 annual report there was Operating Cash Flow of around $13 mil.

Yet dividend payments were over $16 mil.

The annual report says that the payout ratio was 96% of cash profits. How does this work? I could never figure it out. Also couldn't figure out the answer to McLovin's question re growth. I passed at $1.30. Same with WHG in the low $0.80s, similar yield.

FOFA should not have a massive impact, if any impact, on these guys. It may even open up new opportunities to savvy accountants.

 

[VSntchr]

Re: CUP - Countplus

FOFA should not have a massive impact, if any impact, on these guys. It may even open up new opportunities to savvy accountants.

Yeah, to be honest I didnt look deep enough to see the impact, just saw financial planning and generalised.

Id say there is at least a decent amount of growth in accounting - especially if there is a shift away from financial planners.

The use of SMSFs are growing quicky...

 

[ROE]

Re: CUP - Countplus

CBA owns nearly half of CUP via buying Count. They only moved on Count after Cup was spun off – their intentions would be worth considering.

1 Million is small change to Barry Lambert – he is way less invested in CUP than he was Count. I wouldn’t read too much into the ‘size’ of his purchase.

FOFA reforms will probably cause consolidation – Unfortunately there a pretty long list of consolidators who have paid a high price for paying high acquisition prices to be the consolidator. Some success stories too, question is how will the story play out for CUP? - I don't know - I don't have a position.

Logically move by cba because banks only wants wrap platforms and fund management or advice for fund management which is mostly count ...countplus is more accounting and auditing....

Countplus has a bit of payroll processing for contractors as well...these are easy reliable revenue stream....all contractors need to go via a payroll companies so I assume countplus make deal with recruitment agency if there are contractors that want their payroll process, car leasing and salary sacrified send them our way....

 

[prawn_86]

Re: CUP - Countplus

Ann out today saying they are considering some form of spin-off which acquires minority stakes. Seems very conceptual at this stage but it does mention that dividend growth may be slower because of the plans

 

[Ves]

Re: CUP - Countplus

Ann out today saying they are considering some form of spin-off which acquires minority stakes. Seems very conceptual at this stage but it does mention that dividend growth may be slower because of the plans

Is this really just a way of passing over the fact that they appear to be paying out more in dividends than underlying cash profit?

 

[prawn_86]

Re: CUP - Countplus

Well the market seems to like it either way, currently testing new highs, albeit on low volumes