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VRL - Village Roadshow

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Kremmen said:
Massive on-market buy-back for VRL and VRLPA during November announced today, so both shot up about 20c.
Click to expand...

Yep ive just been reading through the The explanatory memorandum and came to the
inescapable conclusion that my purchase of VRL shares @ 82 cents has turned out to
be absolutely brilliant timing. (we need a pat on the back smiley )

http://www.villageroadshow.com.au/p... Memorandum & Indep Experts Report 231009.pdf

With today's close of $1.70 my investment has more than doubled and im earning a fully
franked dividend return of over 11.5% PA.

I thought the valuation of $3.69 per ordinary share was a little over the top as were
many conclusions in the Grant Samuel’s valuation.

Anyway VRL up 11.8% today and VRLPA up 15.6%...also noticed that both are hitting 52 week
highs, amazing considering the bottom was only about 5 months ago..happy days ahead for
the holders.
 
Hi Guys,

I am seriously considering purchase VRL as it is trading at 33% of its Book value!!!


I am not quite sure which shares to purchase, whether ordinary shares or preference shares...


can somone tell me the advantages and disadvantages of both? thanks
 
I am also thinking about buying on Monday, for those who have held VRL for a while, what are your predictions over the next few weeks with the buy back for the share price?
 
VRL - thoughts?

Hi all,
First post for me

I own VRL picked them up at 1.31 a few weeks ago. Any thoughts on their realistic price, there recent announcement has given them some upward movement and would be interested to hear thoughts..

I am considering selling to move elsewear but feel they have a little further to go yet.

Matt
 
Re: VRL - thoughts?

hesitationkills said:
First post for me
Click to expand...
Hi, Matt.

Great topic to start with, given your 40% profit in a few weeks.

VRL and VRLPA usually trade very lightly -- often no trades in a day. There is currently a massive demand in the market, in the form of the buy-back. When that demand goes away, surely the prices will plunge back towards where they were prior to the buy-back announcement?

This is a game of chicken. You want to wait it out for the best price you can get, but you know that if you wait too long, you might be hosed.
 

Remember that book value includes intangible assets which warren buffet usually takes out when calculating the book value figure. This is because intangible assets often have no resale value on the open market.

Using VRL's 30 June balance sheet the in fact have negative net tangible assets of $144million. So if you were looking to buy VRL soley based on their SP/Book value i think you should reconsider....

Cheers
 
bloomy88 said:
So if you were looking to buy VRL soley based on their SP/Book value i think you should reconsider....
Click to expand...
Another thing to mention to those who haven't followed VRL(PA) before, is that they trade infrequently. Indeed, one could go as far as to say that, under normal market circumstances, they are almost illiquid. The buy/sell spread can be huge for long periods.

Once they finish buying back almost half of VRLPA, there will be a lot fewer shareholders. That's certainly not going to help liquidity.
 
Re: VRL - thoughts?


I wouldn't necessarily think so...there will still be a take over premium in the stock and due to the buyback less stock available to the general public, sure VRL will go back to a being a low volume stock but that dont necessarily mean a low or falling/stagnant SP

And then you have to consider the dividend yield will still be a healthy 5.2+% (approx) with the SP at around current levels....with economic activity on the up and keeping in mind that senior management hold over 65% and im sure they like those divis rolling in.
 
Plus VRL aren't going to be buying back their stock unless they beleive that it is significantly below what the directors think is fair value.

That is unless the directors that own 65% of the stock want to increase their percentage of holdings by buying back other people's shares and not participating in the buyback themselves....
 

Thanks mate, it's good point and I will take that into consideration, however VRL is operating in a business environment where intangible assets do counts a lot, because for example a radio station itself with its radio brocasting equipment does not worth a lot of money, its the brand and hosting personalities that sell ads so trying discount that would be slightly unfair to VRL, although it is still a very valid point
 

I understand what you are saying but the radio brand and hosting personalities are internally generated goodwill and aren't actually recorded in the balance sheet and therefore wouldnt contribute to the companies book value. The is an intangible asset for the radio licence but this doesnt include the hosing personalities or the brand, merely a right to broadcast on the air.

It's like how Woolworths has built up such a reputation as a quality supermarket that provides goods at a great price. It would definately encourage people to shop there and increase the wealth of their business, but it isnt actually recorded anywhere in their balance sheet.

Don't get me wrong, i realise that having a good radio brand and personalities would increase the value of VRL's business and it is quite common in businesses like VRL. However, it wouldnt contribute to their book value...
Cheers
 
Re: VRL - thoughts?



VRL hitting a new 52 week high today (Up 4.3%) and closing in on the inevitable $2 mark, seems my analysis (Above) of VRL post buyback was pretty much spot on. all that's needed now for a $2 break through is one or two positive little announcements.
 
Gee VRL(PA) has certainly been an interesting stock to watch recently.

I can't help but think that the kirby brothers will make a move to privitise VRL.

They have expressed interest in the past and are not getting any younger. I think they will try and make a sprint to the finish and privitise within the next 3 years. They already own >70% of the company and will use buy backs to mop up outstanding shares so as to lower the amount they have to pull out of their own pockets to fund the take over, while also increasing the chance of succes of any take over offer.

If I were them I would be doing the exactly the same thing,

The only problem is that VRL already has a fair amount of debt and these buy backs will be lumping the company with alot more debt, But the company can work through this debt over time.
 
I whole heartedly agree with your analysis Tyson, my only surprise was it only took 1 day for my $2 prediction to come good. ill be a little brave and say $2.50 is on the cards sometime this year...IMO
 
danbradster said:
Getting closer So_Cynical - $2.19 close today. I am happy with this company, I got in at $1.31.

Click to expand...

Good to see your still in Dan...ill have to put some thought into the coming top and where it could/should be....any ideas Dan?
 
So_Cynical said:
Good to see your still in Dan...ill have to put some thought into the coming top and where it could/should be....any ideas Dan?
Click to expand...

I am taking 50% of my portfolio out of the market (including VRL) and putting it into property. I am selling the bigger companies, and keeping the smaller ones. You are part of the reason I am convinced to take profit -

- America has a growing budget deficit
- 10% of their GDP goes toward loan interest, which will continue to increase.
- Social security and medicare are already 44% of the federal budget, and rising fast.
- Their people have a negative savings rate.

I am no expert, but this seems very bad for America, and the rest of us.

The property that I'm looking at is student accomodation, a safe 7% yield after expenses not including capital gains. $125k for $270 a week rent in the middle of Brisbane city, near a uni.

I have 50 minutes to sell some more before the end of the day, before tomorrow's public holiday...
 
I wholeheartedly agree with your American thoughts Dan...however im of the opinion the US will die a long, slow, and painful death..the US is to big to fail (to important to the global economy)...so they will be propped up by the rest of the world for decades to come.

As for VRL im gona hold till at least May due to CGT considerations, that and i think we have further to go and more great dividends to come.
 
Plus analysts don't expect the ASX to break 5200 this year, which is only ~10% above the current point. The risk of correction or crash are too high for me to go for a 10% gain.

Although like you hinted at, pulling out causes tax problems and some shares are safer than others. VRL seems to trend fairly independently of the markets.

If the JPY/AUD exchange rate reverses its trend I'll considering investing in Japan. But for now I'll be transitioning toward 50% shares (mainly smaller companies), and 50% property.
 
VRL / VRLPA

VRLPA has historically always traded consistently lower than VRL.

Why has this relationship changed recently? Insights would be appreciated.
 
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