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KGAL.N0000 (Kegalle Plantation PLC)

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by guruji on Fri Jul 10, 2015 8:06 pm

If its 45 hypothetically wt will happen to share price

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by කිත්සිරි ද සිල්වා on Fri Jul 10, 2015 8:25 pm

Dividend hunting herd will go after it and price is likely to have a better appreciation initially.

guruji wrote:If  its  45   hypothetically  wt  will  happen  to  share  price
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by pathfinder on Fri Jul 10, 2015 9:18 pm

This should be a typo.
Issued share quantity is 25MN,If Rs.45 is to be given they need Rs.1.125Bn
Total revenue for the year was Rs.2.023Bn
EPS was Rs.9.16
Are they going to pay a dividend of 5 times of annual EPS????? Evil or Very Mad
The company should take the responsibility for this kind of misleading info.
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Fri Jul 10, 2015 10:16 pm

For all we know, this can be a typo, but bit far stretched as well.

In any case, they can definitely pay this much. Once they paid 13.50/- which was a big amount at the time.

Take a look. This was almost a year ago and now the position was only better.
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In the above by mistake I have named the debentures as "Cash" but the net financial assets position was quite strong.

They currently have around 2.5bn ST investments so paying 1.1 is not a big deal. Only thing profitability of the next few quarters will be affected.

Paying this dividend is actually to the parent RPC Management. If anyone was watching, they were collecting from the market when the prices were falling. As at last report they had 79.08% which now could be 80% (highest possible to maintain public holding?) and thus the perfect time to transfer all the money.

If the dividend is in fact 45/- our retailers will make this shoot up which is an attractive point to exit, as after the payout, this should trade around 55-65/- in my opinion based on other plantations' P/BV and earnings.
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Sat Jul 11, 2015 12:46 pm

guruji wrote:If  its  45   hypothetically  wt  will  happen  to  share  price

Then current price + Rs 45 will be the market value

I like to value a share by dividing EPS by 10% and DPS by 10% to arrive at my maximum affordable price for share

Thus Kegalle EPS 9/.10=90

If the dividend is 45/.10 =450

but definitely it should be 4.50

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 1:36 pm

yellow knife wrote:
guruji wrote:If  its  45   hypothetically  wt  will  happen  to  share  price

Then current price + Rs 45 will be the market value

I like to value a share by dividing EPS by 10% and DPS by 10% to arrive at my maximum affordable price for share

Thus Kegalle EPS  9/.10=90

If the dividend is 45/.10 =450

but definitely it should be 4.50

I now have a strong feeling that it is 45/- in fact otherwise it would have been corrected by now. Anyway don't use the above calculations for one-off dividends.

Also, technically, price should not go up by 45/- It could go up to around 110-115/- level
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by sapumal on Sat Jul 11, 2015 1:41 pm

Divident is not because company doing well. It is to stop possible wage hike by getting out excess money


Last edited by sapumal on Sat Jul 11, 2015 1:43 pm; edited 1 time in total

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 1:43 pm

sapumal wrote:Divident is not because company doing well. It is to stop possible wage hike

Yes and no. How can they stop the wage hike by giving a dividend?

This is just a transfer of cash to the parent effectively.
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by sapumal on Sat Jul 11, 2015 1:46 pm

First Guy wrote:
sapumal wrote:Divident is not because company doing well. It is to stop possible wage hike

Yes and no. How can they stop the wage hike by giving a dividend?

This is just a transfer of cash to the parent effectively.

If there are no excess money, company can't give a wage hike unless rubber, tea prices go up.

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 2:10 pm

sapumal wrote:
First Guy wrote:
sapumal wrote:Divident is not because company doing well. It is to stop possible wage hike

Yes and no. How can they stop the wage hike by giving a dividend?

This is just a transfer of cash to the parent effectively.

If there are no excess money, company can't give a wage hike unless rubber, tea prices go up.

If there is a wage hike, company is bound to pay whether it has money or not. That's one reason for losses as well.
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by Jana1 on Sat Jul 11, 2015 3:32 pm

@ Sapu,

First guy is right. Wage hike has no impact. Effective way to transfer money to parent. I would't be surprised even share price after XD touches 30-35 in a year. The share price mainly hold at current price becz of this investment.

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Sat Jul 11, 2015 5:00 pm

First Guy wrote:
yellow knife wrote:
guruji wrote:If  its  45   hypothetically  wt  will  happen  to  share  price

Then current price + Rs 45 will be the market value

I like to value a share by dividing EPS by 10% and DPS by 10% to arrive at my maximum affordable price for share

Thus Kegalle EPS  9/.10=90

If the dividend is 45/.10 =450

but definitely it should be 4.50

I now have a strong feeling that it is 45/- in fact otherwise it would have been corrected by now. Anyway don't use the above calculations for one-off dividends.

Also, technically, price should not go up by 45/- It could go up to around 110-115/- level

FG if this dividend is real as it seems now i would agree with you.. Actually net asset per share should come down after this dividend..So my calculation will not works as dividend is not paid out of earnings.. Something similarly happened with Watapota investment when they declared a massive dividend above EPS with the view to liquidate the company..

However what still bothers me is now when you declare dividend you have to ensure solvency levels... if not there should be a special notice before issuing such a massive dividend..


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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by poor boy on Sat Jul 11, 2015 8:02 pm

labour strike may be the reason. they are distributing retained earnings to reduce bargaining power of the labour unions, as I think

මටමමය් මෙහෙම වෙන්නේ.කෙගල්ල ගොඩක් අවුරුදු ගානක් තියන් ඉඳලා ලගදී වික්කා.තව දාහක් විතරය තියෙන්නේ.වික්කා විතරය් රුපියල්ල් 45ය් .


Last edited by poor boy on Sat Jul 11, 2015 8:05 pm; edited 1 time in total

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 8:03 pm

yellow knife wrote:
First Guy wrote:
yellow knife wrote:
guruji wrote:If  its  45   hypothetically  wt  will  happen  to  share  price

Then current price + Rs 45 will be the market value

I like to value a share by dividing EPS by 10% and DPS by 10% to arrive at my maximum affordable price for share

Thus Kegalle EPS  9/.10=90

If the dividend is 45/.10 =450

but definitely it should be 4.50

I now have a strong feeling that it is 45/- in fact otherwise it would have been corrected by now. Anyway don't use the above calculations for one-off dividends.

Also, technically, price should not go up by 45/- It could go up to around 110-115/- level

FG if this dividend is real as it seems now i would agree with you.. Actually net asset per share should come down after this dividend..So my calculation will not works as dividend is not paid out of earnings.. Something similarly happened with Watapota investment when they declared a massive dividend above EPS with the view to liquidate the company..

However what still bothers me is now when you declare dividend you have to ensure solvency levels... if not there should be a special notice before issuing such a massive dividend..


KGAL has close to 2.5b in short term investments. Maybe these are maturing and the company has nothing good to do with it. So dividend of 1.1b is less than half of it and would not be a problem. My be they will pay off some debt too.

In addition it has 1b debentures (long term) and investment in AINS.

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 8:06 pm

poor boy wrote:labour strike may be the treason. they are distributing retained earnings to reduce bargaining power of the labour unions.

මටමමය් මෙහෙම වෙන්නේ.කෙගල්ල ගොඩක් අවුරුදු ගානක් තියන් ඉඳලා ලගදී වික්කා.තව දාහක් විතරය තියෙන්නේ.වික්කා විතරය් රුපියල්ල් 45ය් .

A common misconception is that if a company has retained earnings, it can pay out dividends. No, to pay out dividends a company must have cash! In this case, it does.

A company being cash rich is not a reason for employees to ask for a raise! The wage hike is the same for all companies whether they have money or not. Whether they are able to pay or not is a different story.

But let's just wait till Monday just to confirm the 45/-


Last edited by First Guy on Sat Jul 11, 2015 10:25 pm; edited 1 time in total
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Sat Jul 11, 2015 10:14 pm

FG

Will net asset value come down after declaring this Rs 45 dividend?

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sat Jul 11, 2015 10:24 pm

yellow knife wrote:FG

Will net asset value come down after declaring this Rs 45 dividend?

Of course. It will drop by 45/- to around 100/- depending on the June quarter results.

Given the P/BV trading range of other plantations of 0.5-0.8x and giving consideration to the remaining financial assets of KGAL, we could see it trading around 55-65/- after the dividend depending on the June quarter results again.

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by Leon on Sat Jul 11, 2015 11:02 pm

Guys guys do you all think they are going to 45.00 as dividends?
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Sun Jul 12, 2015 9:45 am

Leon

We are expecting two nice announcements on 13th...MS and NAMUN... Lets wait patiently...

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Sun Jul 12, 2015 9:54 am

YK, once KGAL announced this, I quickly checked NAMU.

For 2013/14, KGAL gave 13.50/- while NAMU gave 10.50/-

But NAMU does not have such short term assets to pay another big dividend. Some of the earlier "short term" assets are not listed as long term. Further, the parent has only 65% stake so highly unlikely for a large payout.
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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Sun Jul 12, 2015 10:10 am

Sorry ...Namun should be replaced by Kegalle...

What i wanted to say is that MS and Kegalle will re correct their stance or not...on 13th

Extremely sorry for the mistake... Namun will pay maximum Rs 2 as dividend and if the announcement that will be in august...

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Mon Jul 13, 2015 7:31 am

Those who are interested in Kegalle now

Please consider any announcements coming before 9.30 on Kegalle..

If not Kegalle will fly

Unless for trading purpose dont enter at high prices...

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by First Guy on Mon Jul 13, 2015 7:34 am

Hope this is a fair warning

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by yellow knife on Mon Jul 13, 2015 7:42 am

Perfectly said FG

Since net assets will come down its value has to come down after XD..

Watapota Investment is a nice example .. Whey they declared a dividend out of Reserves and not from Earnings its price sky rocketed those days..

But it fell down and adjusted later to real values...

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Re: KGAL.N0000 (Kegalle Plantation PLC)

Post by poor boy on Mon Jul 13, 2015 8:03 am

last few days activities indicate the announcement is correct and some have acted on leaked information.

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