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RPC - Repcol Limited

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matti_pacman

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Hi all,

This company had a REALLY REALLY big kick in the backside last wk (dropped from $0.60 a few mths ago/$0.32 last wk to $0.15.. :eek: ) after their announcement of potential loss up to 11Million 1H 2007 and the departure of their COO... Wonder what everyone else thought on this?

Just a little background-

ASX Code:RPC
Company: Repcol
Official Listing Date 16 May, 2002
Shares on Issue:156,131,417
Market Capitalization:101,485,421
Dividend Details:-

Dividend per Share: 0.0260
Earnings per Share: +0.0315
Ex-Dividend Date: 18-Mar-2005
Dividend Payable Date: 08-Apr-2005
Dividend Amount: 0.01
Dividend Franked Percentage: 100.00%
Dividend Type: Interim (I)
Dividend Yield: 4.0

Overview:

Repcol is an Australian debt collection company with a 32 year history.

The Company collects debts on behalf of clients in return for a share of the debt collected.

The Company also purchases distressed debts at a deep discount to the face value of the debt from Australian banks, finance houses and credit providers.

P. S. above company information copy from share.com.au-- original posted by Ann
 
Re: RPC- repcol

I had brought up to 10% of my profolio in this stock... abit early as its STILL dropping :banghead: (does it ever stop!?) My thought of buying is follow-

On a micro-level, it has a long history (30yrs +) so this is not a company who just recently start up a service with no experience. It has shown a steady increase in revenue/profit over the yrs, so it doesnt seem to me like a company slowly on the decline. It also has a wide client base, which is very important as IMO, the competitive advantage for a debt collector business is in their established relationships... You cannot start a debt collection business even if you have all the cash/management/equipment if no one offer you to collect debt for them!

On a macro-level, as the interest rate increases/stay at current level ( and i am putting money on it increasing again next yr), the level of bad debt will continue to grow, what business is better than a debt collector?

However, the biggest reason I think now is the time to buy is I recokn RPC is way over-sold due to the recent inflow of bad-news. FEAR is overtaking this stock. The uncertainty make it almost impossible to give a price to RCP , say how much should we discount RPC for the departure of the COO? Thus ppl just throw the stock away at massive discount (book value=$0.39/share)

I cannot see any major downside risk as most bad news is out of the way... (i sure hope!!) and IF, a big IF, the company start reporting some good news, and back into profit next yr/two, it will be in a better shape (from restructuring), and the share price can increase 3-4 folds...

It is not a GREAT company, the management team is definitely doggy, and lack transparencey++, but at current price, its worth the risk. Worst case, you probably get back 50% of your buck if it liquidate... but chances are, it will be back in profit as debt collecting is a sound business, esp in this economic condition.

Hope all these make sense and any feedback is more than welcome!! (esp if you have a different view)

I posted a similar post on share.com.au, but its not generating much responses so I hope I can get some here! ;)
 
Re: RPC- repcol

matti_pacman said:
I had brought up to 10% of my profolio in this stock... abit early as its STILL dropping :banghead: (does it ever stop!?) My thought of buying is follow-

On a micro-level, it has a long history (30yrs +) so this is not a company who just recently start up a service with no experience. It has shown a steady increase in revenue/profit over the yrs, so it doesnt seem to me like a company slowly on the decline. It also has a wide client base, which is very important as IMO, the competitive advantage for a debt collector business is in their established relationships... You cannot start a debt collection business even if you have all the cash/management/equipment if no one offer you to collect debt for them!

On a macro-level, as the interest rate increases/stay at current level ( and i am putting money on it increasing again next yr), the level of bad debt will continue to grow, what business is better than a debt collector?

However, the biggest reason I think now is the time to buy is I recokn RPC is way over-sold due to the recent inflow of bad-news. FEAR is overtaking this stock. The uncertainty make it almost impossible to give a price to RCP , say how much should we discount RPC for the departure of the COO? Thus ppl just throw the stock away at massive discount (book value=$0.39/share)

I cannot see any major downside risk as most bad news is out of the way... (i sure hope!!) and IF, a big IF, the company start reporting some good news, and back into profit next yr/two, it will be in a better shape (from restructuring), and the share price can increase 3-4 folds...

It is not a GREAT company, the management team is definitely doggy, and lack transparencey++, but at current price, its worth the risk. Worst case, you probably get back 50% of your buck if it liquidate... but chances are, it will be back in profit as debt collecting is a sound business, esp in this economic condition.

Hope all these make sense and any feedback is more than welcome!! (esp if you have a different view)

I posted a similar post on share.com.au, but its not generating much responses so I hope I can get some here! ;)
Click to expand...

Mate Westpac and Huntley have this as avoid, sure its bad news at the moment, but thank your lucky stars you where not holding Betcorp! and consider Stop loss...otherwise slide it under the kennel outside and let the dog go for it! Wishing you G'Luck.
 
I have had a look into this stock recently having noted the sharp fall of a couple of weeks ago. Fundamentally this company looks value at the current price its sitting at. My only worry is that managment is not being as transperant and underestimating their net losses as small cap companies tend to do and we may be in for a shock a little down the road.

Managment does seem a little doggy with the proposed name change as well as the way they disclosed their losses. Although having said this Im still going to keep my eye on this one.
 
it has fallen to $0.125 today.. :banghead: Jumped in too early!! Question is should i stay or should i go.... :confused: scary to see the stock keep falling and falling and....
 
Young Gun said:
Managment does seem a little doggy with the proposed name change as well as the way they disclosed their losses. Although having said this Im still going to keep my eye on this one.
Click to expand...

Completely dodgy. Check their annual.. It looks to me they are paying inflated rent for the building that they are in, that happens to be owned by one of the directors :-(

You don't need to be in Subi to be a debt collector ..
 
Morning all,

Been looking into this one for a few weeks now (since their re-listing) as the rumour over here is that George Martin (Coogee Chemicals) could be looking to back door list his Coogee Resources into RPC (Sources close to RPC have denied the rumour).

The original blurb appeared in the ‘West Australian’
http://archive.thewest.com.au/Default/Skins/WANA/Client.asp?Skin=WANA&AW=1213529634366&AppName=2

the re-instatement also cracked a mention in the Spectator.

http://www.businessspectator.com.au...-jump-into-revamped-Repcol-F8242?OpenDocument

After snooping around some of the new top 20 shareholders it certainly appears that a change of direction may be looming?

Chemco the new top shareholder- is George Martin and Cogent Nominees is a Hunter Hall vehicle.

Interestingly, these two also used to be the top 2 shareholders of PCH (hence the link to Jamie Cullen) prior to PCH being taken over.

As an aside Chemco also used to be the # 1 shareholder of Mount Gibson Iron (no longer) however Hunter Hall is now in the top 20.

Burton is a substantial shareholder of companies such as Mirabela Nickel, Wildhorse Energy, JUT, GGP, EXS, ALB, LBY etc.

Topsfield is a sub’ shareholder of Atlas Iron and Jamie Cullen is a non-exec director (of Topsfield not Atlas).

Kahala is Jamie Cullen

Jasper Hill looks to be a Price Waterhouse vehicle and shares significant holdings in ROY with Cheetah.

Surf Board is a sub’ shareholder in Focus Minerals and GWR

Talex is or has been a sub’ shareholder in Alara uranium, European Gas, Strike Resources and NDO

If you look at the holders of the options then you can see that Chemco, Cogent and Kahala will hold the lions roar of the company.

As you can see there is also a substantial leaning towards resources in the above list with a particular bias towards energy and iron.

I think we can expect a foray into resources in the near future as I don’t think these guys are particularly interested in debt collection?

Looking at the present company structure there looks to be around –

670million FPO’s of which the top 20 hold 68%.
360 million options (0.0125c conversion 31.12.2010) of which the top 20 hold 78%.

Undiluted @ 0.025c that gives a MC of < $17 million.

Post restructure RPC have > 4 million in cash and also have a $5.2 million tax refund due so roughly $10 million in liquid assets. (the West Australian article quotes 10 mil cash plus tax credit but I couldn’t find that?)

I’m not going to try and value the Debt collection business (although they have recently won another contract) as I assume it will be spun/sold off (perhaps the De Prinzio’s have some plans for it?).

Jamie Cullen is also to be issued another 66 million shares and 33 million options however these will be escrowed for 12 months.

Obviously with these sort of numbers there will/should be a consolidation down the line.

I would assume that any change in direction would be announced post June 30 (due to the tax refund/credit applicable to RPC) and as the stock appears to be finding support at 2.5c/RPCO @ 1.5c - I would assume we have a couple weeks of churning prior to the end of the tax year that could present an entry?

Assume worst case downside from here to be <50% (they have about 1.4c cash backing) which would put us on the same entry point as the recent placement (good enough odds for me as I have falling buys set).

Now the interesting thing when looking into the possible Coogee Resources rumour is the failed float in 2006.

The original schedule was to list approximately half the company (200 million shares) @ around $2.00 per share primarily to raise money for the development of their Montara fields.
The float was apparently cancelled by the owners as they were unhappy with the value being attributed (I assume due to oil prices at the time).

They since arranged financing on their own via an equity stake to BNB and $270 mil debt facility with NAB, Bank of Scotland and others.
They even won an award for deal

http://www.coogeeresources.com.au/uploads/Coogee Resources Awarded Asia Pacific Deal of the Year.pdf

Now as to timing for a possible public listing- Montara (36mmbbl) is due to commence production Q3 of this year and an eleven well exploration program (30mmbbl prospective) is also due to have commenced this year.
Coogee are also looking to progress a GTL project to develop their 830Bcf gas + liquids asset.
They presently also produce around 1 mmbbl pa from Challis/Jabiru (>4 mmbbl reserves).

Within the current energy climate I wonder if Coogee may not be getting itchy feet and want to go public at this stage of their development?

If this was the case then if we go back to the consolidation point mentioned earlier-

The 2006 prospectus was to value the company @ between $800 mil and $1 billion with an indicative EV of $480 - $660 million.

Looking at the number of shares/options presently available I would assume a 10 to 1 consolidation would be on the cards, which would bring the structure down to a much nicer 73 million FPO’s and 40 million options.

Then using the previous template you could assume a cap raising of another 200 million shares @ $2.50 per share.

This would leave the company with $230 million in cash*, 273 million FPO’s / 40million options and a MC of $680 million (well within the original scope).
*If they decided to pay back their loans of $270 million

The kicker would be those 40 million options would have a exercise price post consolidation of a meagre 12.5c or $2.375 in the money:cool:

The recent Sinopec buy into AED’s leases (which are a little further offshore) placed a value of $600 million on 60% of AED’s assets (stated 100 mmbbl) so 60mmbbl.

If we use that as a benchmark than we could apply $400 million of value to Coogee’s present oil reserves.

This wouldn’t include any exploration upside nor the 830 Bcf gas + liquids resource.

With commercial customers paying upward of $5 per mcf than as an exercise- If we apply $1 mcf igv or $1000 mmcf or $1 million per Bcf then substantial value could be attributed to the gas in the near future.

Needless to say, this is all speculation on my part prompted from rumours in the media so please dyor.

Cheers

J
 
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