CVC 0.00% $2.06 cvc limited

broker report

  1. 829 Posts.
    CVC) RECOMMENDATION @ $1.87  ST:  BUY  LT:  OUTPERFORM  BCM 
    KEY POINTS:  
    o NTA rises sharply 
    with strong Sunland 
    price. 
    o Now trading at a 
    substantial discount 
    to NAV & its peers. 
    Year to 30/6 06(A) 07(E) 08(E) 
    Profit Adj($m) 23.3 30.1 39.8 
    PE (x) 10.0 8.1 8.1 
    Yield (%) 3.2 6.4 6.4 
    Franking (%) 100 100 100 
    Target Price:  $2.90 
     
    Net Tangible Assets Update – With the 
    substantial increase in price for Sunland (SDG) to 
    $4.20, the net asset value (pre-tax) of CVC has 
    increased to $2.20 ps, as outlined in the table on 
    right.  This values Cellnet at current market value & 
    CVC’s interest in Mercury Mobility from the 
    demerger & rights issue at cost. 
    As CVC marks to market its listed & some private 
    equity investments, the increase in Balance Sheet 
    value is offset by an increase in deferred tax 
    provision.  Adjusting for this provision & 
    Intangibles, the NAV & NTAV have increased to 
    $2.02 & $1.97 respectively. 
    At $4.20, SDG comprises 37.3% of Net Assets (pre- 
    tax).  Every 10 cent change in the SDG price, 
    results in a 1.4¢ ps change in CVC net assets. 
    We remain positive on CVC, expecting strong 
    growth over the next few years, based on 
    expansion of existing operations & utilisation of 
    funds raised to broaden increase their highly 
    successful operations, currently trading at a 
    substantial value discount to its NTAV, peers and 
    the general market.   
    Net (Tangible) Asset Calculation 
    Item $m 
    Cash 120.0 
    Listed investments 206.8 
    Private Equity 33.0 
    Other 24.2 
    Total 384.0 
      less Debt 0.0 
    Net Assets (Pre-Tax) 384.0 
       Deferred Tax -36.9 
    Net Assets  (post-tax) 347.0 
      less Intangibles -8.6 
    Net Tangible Assets  (post-tax) 338.4 
      Issued Capital 171.9 
    Net Asset value ps Pre-tax 2.23 
    Net Asset Value ps Post-tax 2.02 
    Net Tangible Asset Value ps Post-tax 1.97 
     Disclaimers.  SHAW, & its wholly owned subsidiary Shaw Corporate Finance Pty Limited, was a 
    participant in the recent placement in CVC, for which they received a fee.  SHAW, its associates, 
    employees & authorised representatives have an interest in the financial products of the CVC. 
    SHAW & its wholly owned subsidiary Shaw Corporate Finance Pty Limited, has been appointed Lead 
    Underwriter for Mercury Mobility, for which they will receive a fee.  SHAW, its associates, employees 
    & authorised representatives have an interest in the financial products of the Company. 
 
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$2.06
Change
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Mkt cap ! $212.6M
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