Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
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Since reporting season rolled into full swing, we have covered 130 individual annual reports of companies we like to varying degrees.
Twenty-four of those have made the grade for further research and modelling. Some of them we have purchased in the past few weeks and some we have already been holding for a while. This update concerns one of Montgomery’s holdings McMillan Shakespeare (ASX MMS).
Management just reported (after the market close) NPAT of $54.3m – up 25% from last year and diluted earnings per share (EPS) growth of 21%. This is significantly ahead of market expectations for the full year and management’s focus on Salary Packing and Fleet Management Services continues to pay off.
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The full year result by CBA recently was a good reflection of the level of growth Australia is currently experiencing – low. The banks reported cash NPAT was up just 4% for the full 12 months or $278m to $7.1b. However, if we back out the 15% reduction in loan impairment expenses, $191m, despite the oligopoly the big 4 have in Australia, the best they could manage was growth overall of 1-2% in banking, funds management and insurance. The 15% improvement in credit quality was definitely a surprise in the result given the scores of jobs losses recently. A development we continue to monitor closely.
Over the past week more than 100 companies have reported their full year results. These results have begun to flow through Skaffold, resulting in the changes listed below for each company. A membership to Skaffold ensures you are constantly up to date with changes to the quality and valuations of every Australian listed company.
To become a Skaffold member and start taking advantage of market inefficiencies that may transpire during reporting season CLICK HERE
And here’s a list of the elements in Skaffold that change automatically as companies report:
1. Earnings and Dividends, Capital History and Cash Flow Evaluate screens updated with 2012 figures
2. New 2012 Skaffold Score
3. 2012 Intrinsic Value – Actual
4. 2013, 2014 and 2015 Intrinsic Value forecasts
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PORTFOLIO POINT: Ten may benefit from improved market conditions, but the TV network owner needs to make up a lot of lost equity ground for its shareholders.
If you read the financial press regularly (and there are good reasons not to), one topic that may have caught your attention is the difficulties faced by our main free-to-air commercial television networks.
Channel Nine, struggling under the weight of a private equity capital structure, has led the charge, but Seven and Ten have followed not far behind. The news for all three has focused on earnings disappointments, equity raisings, asset sales, and various other “restructuring” initiatives – none of them good for equity holders.
At its Annual General Meeting held in Mumbai yesterday, the Chairman of Tata Steel, Ratan Tata, reported an 89% plunge in its June Quarter 2012 net profit. <http://economictimes.indiatimes.com/tata-steel-ltd/stocks/companyid-12902.cms>
Mr Tata said the Company will need to restructure its operations due to a slackening of global steel demand. From their 2006 acquisition of Corus, around half of Tata Steel’s 24 million tonnes per annum capacity is European based.
Meanwhile, Hong Kong listed China Resource Cement has released a disappointing interim report to June 2012. Accordingly, their net profit forecast for each of 2012, 2013 and 2014 has been cut aggressively. Despite building capacity by 25% to 64 million tonnes of cement per annum, the gross profit margin per tonne for 2012 is expected to be less than half that recorded in 2011. China Resource Cement’s net profit should be around HK$1.4 billion in 2012, down 67% from HK$4.2 billion in 2011.
With the recent bid announcement regarding Billabong, Roger Montgomery discusses with Ross Greenwood how clever he believes TPG is, particularly as it relates to the long-term performance of entities they sell. Listen here.
This discussion was broadcast 25 July 2012 on Radio 2gb.
Roger Montgomery discusses his insights into the perfromacne of Fund Managers on behalf of investors, and the implications of poor fund performance on pensioners in this discussion with Ross Greenwood on Radio 2GB broadcast on 15 August 2012. Listen here.
Roger provides his Value.able insights into Leighton Holdings (LEI) and National Australia Bank (NAB) to Ticky Fullerton in this edition of ABC1’s “The Business” braodcast 14 August 2012. Watch here.
Roger discusses how the JB Hi-Fi positive 2012 result conceals future structural difficulties in this Australian article published 18 August 2012. Read here.
