MACCOOK PSF
I have attended Maccook PSF Investor Presentation recently.
These are my key takeaways,
1) PSF is on the way to recovery. Its primary objective after being replaced by AIMS Capital, was to par down the debts. Previously, it has high gearing, and a lots of smaller investments in unlisted reits, which did not pay out any dividends since sub-prime crisis. At the end of 2012, it will has a gearing of 7.75%
2) It is currently receiving a 7.2% returns on its investment. However we should note that its current share price is only 5.4 sing cts vs NTA of Austraila 14.38cts ( S$0.177 ). Therefore, its cash flow based on 7.2% would be S$0.0127. So its theoretical returns on investment is 23.5%.
3) Ongoing litigation with RFML. PSF stands a high chance in winning the claims of A$15 million from RFML. This will works out to be A$0.043 or close to S$0.05.
4) Under the current loan agreement with OCBC, PSF is not able to pay out any dividends until it fully repay its loan. By Dec 2012, PSF gearing will be less than 10%, which is in a better position to negotiate any new terms for any potential loans.
My conclusion:
1) Buy on weakness now. After 2012, PSF will resume payout. I estimate a payout of S$0.005 or 50% of its cash flow. Based on current price of 5.4cts, its abt 10% returns.
2) Potential catalyst of winning the litigation with RFML, MAY declare a capital distribution to reward the shareholders who has been through with PSF for the past 3-4 yrs.
I have attended Maccook PSF Investor Presentation recently.
These are my key takeaways,
1) PSF is on the way to recovery. Its primary objective after being replaced by AIMS Capital, was to par down the debts. Previously, it has high gearing, and a lots of smaller investments in unlisted reits, which did not pay out any dividends since sub-prime crisis. At the end of 2012, it will has a gearing of 7.75%
2) It is currently receiving a 7.2% returns on its investment. However we should note that its current share price is only 5.4 sing cts vs NTA of Austraila 14.38cts ( S$0.177 ). Therefore, its cash flow based on 7.2% would be S$0.0127. So its theoretical returns on investment is 23.5%.
3) Ongoing litigation with RFML. PSF stands a high chance in winning the claims of A$15 million from RFML. This will works out to be A$0.043 or close to S$0.05.
4) Under the current loan agreement with OCBC, PSF is not able to pay out any dividends until it fully repay its loan. By Dec 2012, PSF gearing will be less than 10%, which is in a better position to negotiate any new terms for any potential loans.
My conclusion:
1) Buy on weakness now. After 2012, PSF will resume payout. I estimate a payout of S$0.005 or 50% of its cash flow. Based on current price of 5.4cts, its abt 10% returns.
2) Potential catalyst of winning the litigation with RFML, MAY declare a capital distribution to reward the shareholders who has been through with PSF for the past 3-4 yrs.
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