Neratel

seen like they have problem continue the high dividend payout. The recent dividend came at the expense of increase bank borrowing.

Look at the past 5 years
- revenue was pretty constant (flat?)
- slight declining trend in term of GPM albeit low
- both distribution & selling and admin costs increased
leading to lower NPM.

FCF averaged about $14mil per year. Dividend payout has more or less kept inline with FCF. NeraTel could have paid out a final div of 1.5cts to make a full year div of 4cts (although market will still be disappointed because they paid out 2.5cts for interim div leading market to set unrealistic expectations!) if they choose to but they didn't.

Loan appears to be more of a WC situation rather than poor businesses although businesses seems more challenging with some margin squeezes.

Looking forward, assuming the same trend for revenue and margins, how much they can and deem fit to pay out as dividend for FY16 will depends very much on their CAPEX. I reckoned they can afford to restore to a 4cts div if CAPEX goes below $3mil.

NeraTel is a pretty matured business. There are some excitement about the next phrase of growth with expansion into Myanmar but nothing much came out of it. Without any expansion of businesses, price will probably tracks 6.5% to 7% yield.

No doubt the contract are drying up and it will have an impact on cash flow and the ability to pay dividend

2c worth

(21-03-2016, 02:25 PM)CCUV Wrote: No doubt the contract are drying up and it will have an impact on cash flow and the ability to pay dividend

2c worth

Coincidentally I have been looking at Neratel last Q report. Seems they are matching up Q / Q. Achieving 3 cts div (5.5%) seems not a problem if they maintain their current Q cashflow.
Neither do they have China exposure. So I am curious on what do you based on your thoughts ?

(21-03-2016, 03:29 PM)corydorus Wrote:

(21-03-2016, 02:25 PM)CCUV Wrote: No doubt the contract are drying up and it will have an impact on cash flow and the ability to pay dividend

2c worth

Coincidentally I have been looking at Neratel last Q report. Seems they are matching up Q / Q. Achieving 3 cts div (5.5%) seems not a problem if they maintain their current Q cashflow.
Neither do they have China exposure. So I am curious on what do you based on your thoughts ?

In FY2015, the Group secured approximately $207.0 million in order in-take, a decline of 4.6%

compared to $217.0 million in FY2014.

They need about 15m to pay a 4c dividend each year but last year the Net cash flows from / (used in) operating activities is only 7m before capex

Nav at 15.5c is trading 3.5x books and 14.6x p/e.The former saving grace was the high dividend which got cut from 2c to 1c. With a slowing economy and orders, it is anybody guess whether the stock is a value at current price.

2c worth

(21-03-2016, 05:00 PM)CCUV Wrote:

(21-03-2016, 03:29 PM)corydorus Wrote:

(21-03-2016, 02:25 PM)CCUV Wrote: No doubt the contract are drying up and it will have an impact on cash flow and the ability to pay dividend

2c worth

Coincidentally I have been looking at Neratel last Q report. Seems they are matching up Q / Q. Achieving 3 cts div (5.5%) seems not a problem if they maintain their current Q cashflow.
Neither do they have China exposure. So I am curious on what do you based on your thoughts ?

In FY2015, the Group secured approximately $207.0 million in order in-take, a decline of 4.6%

compared to $217.0 million in FY2014.

They need about 15m to pay a 4c dividend each year but last year the Net cash flows from / (used in) operating activities is only 7m before capex

I am using ops cash flow excluding the bit on change in WC +  CAPEX as my definitions of FCF for NeraTel to determine its ability to pay what possible amount of dividend.  I see change in WC as a transitional thing which in NeraTel's case, I believe their receivables should be recoverable and hence bank loan is for WC purpose.

(21-03-2016, 05:17 PM)GPD Wrote:

(21-03-2016, 05:00 PM)CCUV Wrote:

(21-03-2016, 03:29 PM)corydorus Wrote:

(21-03-2016, 02:25 PM)CCUV Wrote: No doubt the contract are drying up and it will have an impact on cash flow and the ability to pay dividend

2c worth

Coincidentally I have been looking at Neratel last Q report. Seems they are matching up Q / Q. Achieving 3 cts div (5.5%) seems not a problem if they maintain their current Q cashflow.
Neither do they have China exposure. So I am curious on what do you based on your thoughts ?

In FY2015, the Group secured approximately $207.0 million in order in-take, a decline of 4.6%

compared to $217.0 million in FY2014.

They need about 15m to pay a 4c dividend each year but last year the Net cash flows from / (used in) operating activities is only 7m before capex

I am using ops cash flow excluding the bit on change in WC +  CAPEX as my definitions of FCF for NeraTel to determine its ability to pay what possible amount of dividend.  I see change in WC as a transitional thing which in NeraTel's case, I believe their receivables should be recoverable and hence bank loan is for WC purpose.

I don't see how Neratel will borrow to pay dividend when they in fact cut dividend. So I do agree is for WC. Last Q is promising. So I suspect there is good potential of better result in next Q but will only know after...

Vested small.

Northstar has 53%.

What is the worst case scenario northstar can screw minority shareholders (47%)

1)was thinking if they can just issue placement rights to themselves at super low prices to dilute minoriy shareholders? Is this possible?

Can they do such a thing or is there some regulation that states that since they are the interested party , there needs to be a vote among the minority shareholders only to garner majority among the 47% to allow such placement rights?

2)cease all dividends making neratel an un attractive investment and offer a low ball offer to take it private
Is this possible? 

Hope to hear your views as i personally find this a compelling investment except for the overhanging question mark on the above 2 questiins

Unusual buy up and vol today.... Queried by SGX followed by trading halt....

GO?