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Snake Pliskin said:
It seems it may go the other way and test $1.52-1.54 after today`s action.
TOY - Toys 'R' Us Anz
- Thread starter BraceFace
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It seems it may go the other way and test $1.52-1.54 after today`s action.
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scranch said:
That explains the gap down this morning. I didn`t check the div date, just analysing it with a taint of verbosity. What a good short signal yesterday provided if one was aware of the div date; almost guaranteed success.
Snake
It seems every bloody stock I own has a trading holt on it. First REb now fun. I tried calling Funtastic before but it's a public holiday in melbourne for the big race. Personally I see two reasons for a trading holt. 1) aquisiton 2) Profit downgrade. Either way we either stand to make a quick profit or a new buying opportunity may present itself.
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i wouldnt be disspaointed that REB is in a trading haltTheRage said:
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no one ever went broke from making a generous profit!!TheRage said:
I am wondering also whether it might have something to do with the Radica contract that was proposed to end in the 4th quarter of this year which was worth 10 million or whether it might have something to do with the 5 million that was just raised. These are just some other possibilities. Really I have no idea though.
ANNOUNCEMENT OUT - fun to have a strategic alliance with ABS over Judias (a subsidary company)- announcement just out. sounds like a great long term fit. to take part in the revenue of all Judias operations in AUST and NZ and US.
hopefully kicks start FUN into a bit of action. FUN to acquire for $44 Million
5 million in cash and 39million in Skrip.
hopefully kicks start FUN into a bit of action. FUN to acquire for $44 Million
5 million in cash and 39million in Skrip.
At least this answers the question why they wanted to raise more cash through the share offering. I remember the reason being given as retiring debt which I thought at the time seemed ridiculous considering how low their debt was. Obviously writing script for this aquisition will further dilute our ownership in this stock. It will be interesting when I get the time to see if I can track down the revenue in ABS annual report that comes from Judica. My feeling is that this will determine whether there will be a jump or not in the Sp.
SP before the trading halt was around $1.68. Hit a low this morning of $1.37 but slowly regaining strength (currently $1.43). Seems the market has mixed feelings about the aquisition.
I have holding in both ABS and FUN so I guess as you mentioned previously only time will tell.
Gigabyte
I have holding in both ABS and FUN so I guess as you mentioned previously only time will tell.
Gigabyte
I read the release and apparently the Judica nets 8.5 million EBITA. Off of a 44 million investment that is an 19% return on investment 8.5/44. While our share base will be diluted by 19% the EPS from Judica should help make some of this dilution.
The one concerning feature of the aquistion is that ABS will own 19% of Fun once it is all done and dusted. While I think Fun would do well to team up with ABS in America I can't help but wonder how hard it would be to buy Fun out completely especially when the Sp is around the 1.30 mark. If I was Eddie Grove that's what I would do.
The one concerning feature of the aquistion is that ABS will own 19% of Fun once it is all done and dusted. While I think Fun would do well to team up with ABS in America I can't help but wonder how hard it would be to buy Fun out completely especially when the Sp is around the 1.30 mark. If I was Eddie Grove that's what I would do.
MichaelD
Not fooled by randomness
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Didn't anyone read the bottom half of the announcement;
"Oh and by the way, we're downgrading our profit estimate for the year by 20%".
Pretty sneaky if you ask me announcing it like this.
"Oh and by the way, we're downgrading our profit estimate for the year by 20%".
Pretty sneaky if you ask me announcing it like this.
Yeah I missed it until I read it on Yahoo finance this morning. I completely agree with you they are trying to sugar coat their bad performance with a little acquisition teaser. Net profit margin has been consistently around 6% for Funtastic for the past number of years. Off of these new forecasts it drops to 3%. So slow down in retail trading doesn't have everything to do with the result. They are blaming restructuring costs of 12 million in the reduced NPAT. Does anyone know what restructuring costs they are referring to.
Oh crap I don't think we have seen the worst of the share price drop yet. Fun is now forcasting low NPAT of 12 million and high of 15 million. Also with the share offer that generated 5 million cash this added 3 million shares to the 127 million outstanding. Therefore EPS = 12 million/130 million = 9cents per share low range and 15/130 = 11.5 cents high range. If Price = EPS *PE Ratio and Fun's average 5 year PE ratio 10.4 then we can expect price to range from 0.09 * 10.4 =$0.94 and 0.115 * 10.4 = $1.19. This is the price expectation minus the Judica purchase. If you include the Judica purchase and you add in the extra 19% script you end up with 154 million shares outstanding but you also need to add in the EBITA of 8.2 million which given the usual conversion to Net Profit after tax of about 55% of EBITA we then know that this 8.2 million is worth about 4.51 million NPAT. If we add this 4.51 with say the high forecast for next year of say 15million we get 19.5 million predicted NPAT. We then divide 19/154 = 12.3 cents per share. Price in one year .123 * 10.4 = $1.28. This is my own analysis so take it with a grain of salt but I hope that Fun can start improving their Net profit margin or start increasing their sales or start reducing the number of shares available so that EPS can start to look better again. By the way I still own Fun.
In the SMH this morning it states "the price of the shares to abc will be based on a 30 day average following the announcement.Yesterdays close would have given abc a bit over 22%,so triggering a full takeover bid.It states that this was not probably what eddy groves had in mind when the deal was first suggested."If the share price continues to drop it could become a real disaster all round.
To go into a deal like this so close to Christmas it makes you wonder what their forward sales are like.
Smells a bit of incompetent management.
Brian
To go into a deal like this so close to Christmas it makes you wonder what their forward sales are like.
Smells a bit of incompetent management.
Brian
I tend to agree with you. I think Fun's management are seeing Stars in their eyes in America. I think the only reason script was given in place of a debt offering was because this was ABC's stipulation to the sale. Fun may or may not have been able to generate the funds through debt but in my mind why would you put your money into an aquistion just because you can when you know it won't hurt the balance sheet. Abc stands to benefit from this deal strongly by mounting pressure on Fun board to preserve costs on toy sales to their learning centres and also by getting shares cheaply into Fun. If ABC sold their Judica component out right to Fun they would have only received a Capital Gain not an ongoing royalty. I really think the acquistion stinks given the timing of it and I can't help but feel it was timed all too well with the negative news on earnings. I am going to call Fun management today and discuss some of these issues and see if I can get some candid answers. On another note it is interesting that Perpetual, the biggest investor in Fun, sold out 2% of their ownership in Fun last week. I wonder if they are buying back in at a cheaper rate. I am sure the sell out was merely a coincidence 
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