Passengers sought for latest float
The upcoming float of QR National may be the second-biggest sale of an Australian public asset, but Roger Montgomery warns investors against investing in capital-intenstive businesses with low returns on equity. Read article.
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.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Rici Rici
:
Just had a quick view over the QR National prospectus. I feel there is too much emphasis on EBIT and EBITDA and not enough emphasis on NET PROFIT.
Interestingly even the cash flow statements are attempting to create a ‘better picture’ by stating operating cashflow before interest and tax costs. Attempting to move these items ‘below the line’ is never a good sign, in my opinion, of things to come. The company isnt even listed yet, and already the creative accounting is in full swing.
Roger Montgomery
:
Good observations Rici Rici.
Eamon
:
It would be nice if the government floated the Australia post. They certainly have a competitative advantage. A much nicer investment vehicle to get on board.
Roger Montgomery
:
Hi Eamon,
I don’t think you will be waiting forever for the float of Aust Post. Changes at management level (ex NAB) I believe might be a precursor to a privatisation.
Eamon
:
Excellent! I’ll have my bazooka armed and loaded.
Sam
:
I understand this is an older post, however lately I have been interested in the way in which Governments privatise. My main query is how would a private enterprise be forced to provide the same services as the Australian Post in rural and remote Australia, which are surely unprofitable in most part.
Kind Regards
Sam
Mick
:
According to an article in today’s press, this from Lance Hockridge:
He said privatisation was the best option bcause taxpayers should not be expected to fund the company’s growth.
Where does he think the money for the $150m subsidy (that will help ‘grow’ the business) is coming from? It’s coming from the taxpayer!
One might also argue QR didn’t mind spending the taxpayer’s dollars on stagnant growth for years, so how can it change now? Perhaps internal changes are required…
Roger Montgomery
:
Hi Mick,
Thanks for pointing out those comments regarding tax payers funding QR National’s growth. Are you suggesting it is a sign of arrogance or ignorance? Either is less than ideal and I assume thats what you are saying.
Mick
:
Hi Roger
I won’t say it’s arrogance or ignorance, but I definitely think it’s marketing spin!
Roger Montgomery
:
Hi Mick,
I see. Spin it is then.