Neratel

[KopiKat]

Is it alarming?
As Q4 need to have positive FCF 7-8mil to make up the 4cents payout, else it will start to deplete its cash balance...

For previous years, the dividend is only paid out some time in Q2, usually in May. So, another 7-8mths. If they continue to generate 5-6mil FCF from operation, I don't see any problem building up another $14+mil FCF for the 4ct dividends. Will of course continue to monitor closely...

---

Base on cash flow statement, PBT increases by almost 100%, while OCF is only approx 30% of FY2011

The main culprit is the working capital, mainly accumulating of receivable (both trade and others), and depleting of payable (both trade and other). It seems as Kopikat highlighted, the collection terms are getting longer, while paying terms are getting shorter

One possible reason is Neratel is now getting Nera products directly from the factory instead of Eltek's sales office (Nera Networks? or Norway?). The payment terms + margins (may be better) may have changed accordingly as they are dealing with a different entity. I do see improving profit margins from FY11.

[hongonn]

I wonder whether the recent price run up is due to the earnings news leak.

Anyway just a wild guess, will see how the price react tomorrow.

[specuvestor]

What could be the reason why there is increase in receivable? hard to receive money from Mena??

AFAIK, when biz goes up, we'd expect to see a corresponding increase in Receivables (credit to customers) and Payables (credit from supplier). Let's look at their accts for the past few quarters / years,

[wrap]
[table=NeraTel]
Q312
Q212
Q112
FY11
FY10
FY09[/table]
[table=Receivables]
60,191
52,643
58,487
56,272
39,199
25,280[/table]
[table=Payables]
46,701
46,626
47,206
54,047
37,302
30,508[/table]
[/wrap]

Prior to FY12, we do see a good balance between Payables and Receivables. But, from FY12, it does look like their payment terms are shorter than their collection terms. Not sure if it's by choice or not tho'...

Is it alarming?
As Q4 need to have positive FCF 7-8mil to make up the 4cents payout, else it will start to deplete its cash balance...

For previous years, the dividend is only paid out some time in Q2, usually in May. So, another 7-8mths. If they continue to generate 5-6mil FCF from operation, I don't see any problem building up another $14+mil FCF for the 4ct dividends. Will of course continue to monitor closely...

---

Base on cash flow statement, PBT increases by almost 100%, while OCF is only approx 30% of FY2011

The main culprit is the working capital, mainly accumulating of receivable (both trade and others), and depleting of payable (both trade and other). It seems as Kopikat highlighted, the collection terms are getting longer, while paying terms are getting shorter

One possible reason is Neratel is now getting Nera products directly from the factory instead of Eltek's sales office (Nera Networks? or Norway?). The payment terms + margins (may be better) may have changed accordingly as they are dealing with a different entity. I do see improving profit margins from FY11.

In 4Q10 ie end FY10 rev hit $48.5m and 4Q11 ie end FY11 rev hit $47.9m so these should be a good comparable of A/R and A/P.

In addition back then GM was 24% OPM 10.6% in 4Q10 and 30.2% GM 13.4% OPM in 4Q11 vs now 29.6% and 13.5%

If i)4Q revenue continues to rise as per historical and ii)dividend remains at 4cts (conservatively) then one should not be selling.

[WolfT]

Last night,I dreamt that Neratel goes up to 80cts. Dividend goes up to 6cts.
I will continue to buy some more. Hope i can still hit my target of 1000lots.
Anyone still have anymore debt free, high yield and profitable coy to intro?

[CityFarmer]

Is it alarming?
As Q4 need to have positive FCF 7-8mil to make up the 4cents payout, else it will start to deplete its cash balance...

For previous years, the dividend is only paid out some time in Q2, usually in May. So, another 7-8mths. If they continue to generate 5-6mil FCF from operation, I don't see any problem building up another $14+mil FCF for the 4ct dividends. Will of course continue to monitor closely...

---

Base on cash flow statement, PBT increases by almost 100%, while OCF is only approx 30% of FY2011

The main culprit is the working capital, mainly accumulating of receivable (both trade and others), and depleting of payable (both trade and other). It seems as Kopikat highlighted, the collection terms are getting longer, while paying terms are getting shorter

One possible reason is Neratel is now getting Nera products directly from the factory instead of Eltek's sales office (Nera Networks? or Norway?). The payment terms + margins (may be better) may have changed accordingly as they are dealing with a different entity. I do see improving profit margins from FY11.

I do see the same.

The allowance for doubtful debt is quite minimum, it shows management is confidence on collection

Having said so, it deserves a closer watch...

[KopiKat]

Only 49ct....

NORTHSTAR MAKES MANDATORY UNCONDITIONAL CASH OFFER FOR NERA TELECOMMUNICATIONS AT S$0.49 PER SHARE

MANDATORY UNCONDITIONAL CASH OFFER

[yeokiwi]

Only 49ct....

NORTHSTAR MAKES MANDATORY UNCONDITIONAL CASH OFFER FOR NERA TELECOMMUNICATIONS AT S$0.49 PER SHARE

MANDATORY UNCONDITIONAL CASH OFFER

Save as disclosed in this Announcement, as at the Offer Announcement Date, none of the
following persons, namely, (a) the Offeror, Holdco, GP, NS III, Northstar Advisors and their
respective directors, and (b) SCB, as financial adviser to the Offeror in connection with the
Offer (each, a "Relevant Person"):

(i) owns, controls or has agreed to acquire any (A) Shares, (B) securities which carry
voting rights in the Company, © convertible securities, warrants, options or
derivatives in respect of, such Shares or securities (collectively, the "Company
Securities");

(ii) has received any irrevocable undertakings from any party to accept or reject the Offer;

(iii) has entered into any arrangement (whether by way of option, indemnity or otherwise)
in relation to shares of the Offeror or the Company which might be material to the
Offer; and

(iv) has (A) granted a security interest over any Company Securities to another person,
whether through a charge, pledge or otherwise, (B) borrowed from another person
any Company Securities (excluding borrowed Company Securities which have been
on-lent or sold) or © lent any Company Securities to another person.


Eltek has agreed but Northstar did not receive irrevocable undertaking from Eltek?
This is basically 骑驴找马。
Let's see whether ST Electronics will show hand again.

[KopiKat]

Only 49ct....

NORTHSTAR MAKES MANDATORY UNCONDITIONAL CASH OFFER FOR NERA TELECOMMUNICATIONS AT S$0.49 PER SHARE

MANDATORY UNCONDITIONAL CASH OFFER

Save as disclosed in this Announcement, as at the Offer Announcement Date, none of the
following persons, namely, (a) the Offeror, Holdco, GP, NS III, Northstar Advisors and their
respective directors, and (b) SCB, as financial adviser to the Offeror in connection with the
Offer (each, a "Relevant Person"):

(i) owns, controls or has agreed to acquire any (A) Shares, (B) securities which carry
voting rights in the Company, © convertible securities, warrants, options or
derivatives in respect of, such Shares or securities (collectively, the "Company
Securities");

(ii) has received any irrevocable undertakings from any party to accept or reject the Offer;

(iii) has entered into any arrangement (whether by way of option, indemnity or otherwise)
in relation to shares of the Offeror or the Company which might be material to the
Offer; and

(iv) has (A) granted a security interest over any Company Securities to another person,
whether through a charge, pledge or otherwise, (B) borrowed from another person
any Company Securities (excluding borrowed Company Securities which have been
on-lent or sold) or © lent any Company Securities to another person.


Eltek has agreed but Northstar did not receive irrevocable undertaking from Eltek?
This is basically 骑驴找马。
Let's see whether ST Electronics will show hand again.

You missed out the 1st part in red.
Also,

1. INTRODUCTION

Standard Chartered Bank ("SCB") wishes to announce, for and on behalf of Asia Systems Ltd (the "Offeror"), that the Offeror has agreed to acquire pursuant to an off-market transaction an aggregate of 181,136,000 ordinary shares (the "Shares") in the issued and paid-up capital of Nera Telecommunications Ltd (the "Company"), representing approximately 50.05% of the total issued Shares1, which are owned by Eltek ASA (the "Acquisition").

As a result of the Acquisition, the Offeror is required to make a mandatory unconditional cash offer (the "Offer") for all the remaining Shares, other than those Shares owned, controlled or agreed to be acquired by the Offeror as at the date of the Offer (the "Offer Shares") pursuant to Rule 14 of the Singapore Code on Take-overs and Mergers (the "Code").

[yeokiwi]

From Eltek ASA IR news

http://www.eltek.com/wip4/detail_ir.epl?...8&cust=339

Eltek ASA (Eltek) has today entered into an agreement to sell all its shares in Nera Telecommunications Ltd (NeraTel) to Asia Systems Ltd. for a cash consideration of SGD 88.8 million (approximately NOK 418 million) before transaction costs. No conditions are outstanding and Eltek expects to complete the transaction early next week. The transaction marks the final step in Elteks strategic refocusing on its power electronics business.

I suppose this offer has nothing to do with the agreement between Eltek and Asia Systems.

[KopiKat]

From Eltek ASA IR news

http://www.eltek.com/wip4/detail_ir.epl?...8&cust=339

Eltek ASA (Eltek) has today entered into an agreement to sell all its shares in Nera Telecommunications Ltd (NeraTel) to Asia Systems Ltd. for a cash consideration of SGD 88.8 million (approximately NOK 418 million) before transaction costs. No conditions are outstanding and Eltek expects to complete the transaction early next week. The transaction marks the final step in Elteks strategic refocusing on its power electronics business.

I suppose this offer has nothing to do with the agreement between Eltek and Asia Systems.

Asia Systems is part of Northstar,

3. INFORMATION ON THE OFFEROR AND THE NORTHSTAR GROUP
3.1 The Offeror
The Offeror is a newly incorporated exempted company with limited liability formed under the laws of the Cayman Islands on 30 October 2012 for the purposes of making the Offer. As at the Offer Announcement Date, the sole shareholder of the Offeror is PGA Partners Ltd....

As at the Offer Announcement Date, the Offeror has an issued and paid-up share capital of US$0.01 consisting of one (1) share.