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PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licence!

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Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

See above for the discussion on exluding the Prefs for this calculation.

They should also earn some R200 million next year.

(What's more - and not taken into account in the above - you could also add back a couple of hundred million of excess write-offs - they have written every possible doubtful figure down to nil)

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

I don't generally plan to increase capital losses - albeit very modest ones  in this case - but still. However while the air starts to thicken with the birds of prey

I am still waiting to see a margin of safety develop - and that in this case seems to turn on more info needed on these developments?

I hate this sort of lender - as they are inherently the ugly face of capitalism...

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

They are not a lender at all.

They are purely an insurance company.

To your point on lenders however - they are necessary!

There is nowhere else to borrow money and nobody holds a gun to anyone's head and forces them to borrow money.

The law, as it stands, is all in favour of the borrower - I think lenders need their heads read.

True microlenders (leg-breakers) - well - that's really a form of criminal enterprise, isn't it(?!)

The government should allow more liberal establishment of "stokvels" but they don't want to for obvious reasons.

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Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

 You are right of course -it is not presently a lender(  - it really is an aid to my understnading if I read the sens - i must do more of that )

but that said the question remains - what will they be going forward - apart from the lofty ideal of being an investment holding company - of which there sees to be

an oversupply?    

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

They have an insurance licence!

They are already writing business generating R84m profit + R114m interest income.

Apart from that - they essentialy have R1833M + part of R267m + R200m profit for the coming year - so R2,2 Billion to invest.

If they just invest this in a quality diversified portfoio of internationa property stocks - they could extract - say 12%

They don't really HAVE to do much at all.

 

So 264M + R100m on growing insurance business = R364 per year/1428B SHARES - TAX =18,4c per share income as things stand.

 

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

BTW

Thse prefs that seem to worry everyone so much...

AXL could bu them back in the market for R450m

The dividend hurdle to clear on these is around R26m per annum if they wish to oay a divi to ordinary share holders.

If they withold divs for 5 years - with a 10% internal growth rate... the NAV of these prefs drops to nearly NIL. The NAV is pegged in ZAR to boot.

They are of no consequence in determing the EV of AXL except in a distributive model and then they are worth very little - especialy considering the Rand takeout cost.

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

BTW

Thse prefs that seem to worry everyone so much...

AXL could buy them back in the market for R450m

The dividend hurdle to clear on these is around R26m per annum if they wish to oay a divi to ordinary share holders.

If they withold divs for 5 years - with a 10% internal growth rate... the NAV of these prefs drops to nearly NIL. The NAV is pegged in ZAR to boot.

They are of no consequence in determing the EV of AXL except in a distributive model and then they are worth very little - especialy considering the Rand takeout cost.

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

Of course, if they choose not to acquire the prefs and rather to settle the coupoin rate on the face value - that could get a bit expensive at R100M+

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

Why on earth would they elect to invest in "international property stocks" ( a category which covers wide spectrum:  so as in what part of the spectrum? )  

Contributor

Re: PHOENIX - R2 Billion CASH = POTENTIAL! - Especially when you have a Hen's tooth Insurance Licenc

No idea!

Who said they would?

 

Not me.

 

I did say: "If they just invest this in a quality diversified portfoio of international property stocks - they could extract - say 12%

They don't really HAVE to do much at all."