Wirraway
19th Feb 2004, 22:38
Fri "The Australian"
Flight of phoenix Roo
Michael West
February 20, 2004
PHEW! Qantas has survived. That Mangy Old Roo, barely nascent last year, has been saved from extinction by a modest $358 million half-year profit.
"The airline's future is not guaranteed," said Qantas boss Geoff Dixon after the liberation of Iraq and as the SARS virus was wreaking havoc. (And negotiations for a merger with Air New Zealand were awaiting the regulator's approval. And the unions were pushing for better pay.)
There was no talk of the airline's demise yesterday, though. Now it appears the anaemic marsupial might record a coy $600 million profit this year.
In the spirit of beneficence, Marge had exhorted readers to chip in for the "Adopt a Sick 'Roo. Help Qantas Survive Fund".
Donations duly flooded in: Russian roubles, a 1936 coin from East Africa, a 10 ore note from Norway and assorted coppers from the Belgian Congo and Mozambique. What shall we do now? The fund shall remain open in case of further frightening circumstances.
In the meantime, it seems there have been one or two lapses in the areas of corporate governance and disclosure. We had better bring these up now, perhaps with chairman Margaret Jackson now she's back from John Travolta's 50th birthday party in Mexico -- an unavoidable business expense no doubt.
Under the Australian Stock Exchange Guidance Regime on Continuous Disclosure, Section 91 states: "Listing rule 3.1 provides examples of information that, if material, would require disclosure. One of those examples is a change in the entity's previously released financial forecast or expectation.
"As a general policy, a variation in excess of 10 per cent or 15 per cent may be considered material, and should be announced by the entity as soon as the entity becomes aware of the variation."
Of course, Qantas could not be accused of any naughtiness whatsoever, let alone spin, but it seems there must have been some kind of oversight.
At the beginning of December last year analysts were forecasting a first-half net profit of roughly $300 million for the poor, near dead creature. Little wonder, as the company had ruefully disclosed to the ASX and the press last year how terrible things were.
Yesterday, though, the scurvy beast handed down a profit well in excess of 10 per cent to 15 per cent of that $300 million mark.
Sadly, there's more. For in December analysts mystically began lifting their forecasts after a Qantas briefing.
The mums and dads weren't told of higher numbers, so we can only imagine the changing forecasts were the result of ... magic.
Far be it for your blushing scribe to impugn the integrity of Qantas's governance. It is a far more reasonable explanation that the research community - analyst by analyst - concluded that the profit would be around the $313 million mark. Then they individually began lifting their numbers again only this month and last. Sheer wizardry!
This - divination, that is - must be the only explanation.
Qantas could surely not have countervailed the deliberations of the Australian Securities and Investments Commission on "selective briefings".
Selective briefings are when a company tells favoured analysts working for large stockbroking companies (with very fine views of the Yarra or Sydney Harbour) some material information that is not readily available to the rest of the market.
Then these analysts tell their major clients, such as superannuation funds, the story in order that their clients might gain advantage by trading on this information, make bucketloads of money and remit the favour to the analysts via commissions.
ASIC has admonished both AMP and Southcorp for giving selective briefings. But we can't imagine that Qantas would possibly divulge price-sensitive information to select parties. Not on your nelly.
A few other observations. Qantas is clearly going gangbusters and is on track for a record year.
Shareholders should be pleased.
Yet despite the headline numbers, EPS was actually down 5 per cent, from 21c a share to 19.9c due to dilution of shares.
Looking at the result from domestic aviation - EBIT up 64 per cent to $324 million - one might construe that Virgin Blue, too, is making a killing and printing money.
==============================================
Flight of phoenix Roo
Michael West
February 20, 2004
PHEW! Qantas has survived. That Mangy Old Roo, barely nascent last year, has been saved from extinction by a modest $358 million half-year profit.
"The airline's future is not guaranteed," said Qantas boss Geoff Dixon after the liberation of Iraq and as the SARS virus was wreaking havoc. (And negotiations for a merger with Air New Zealand were awaiting the regulator's approval. And the unions were pushing for better pay.)
There was no talk of the airline's demise yesterday, though. Now it appears the anaemic marsupial might record a coy $600 million profit this year.
In the spirit of beneficence, Marge had exhorted readers to chip in for the "Adopt a Sick 'Roo. Help Qantas Survive Fund".
Donations duly flooded in: Russian roubles, a 1936 coin from East Africa, a 10 ore note from Norway and assorted coppers from the Belgian Congo and Mozambique. What shall we do now? The fund shall remain open in case of further frightening circumstances.
In the meantime, it seems there have been one or two lapses in the areas of corporate governance and disclosure. We had better bring these up now, perhaps with chairman Margaret Jackson now she's back from John Travolta's 50th birthday party in Mexico -- an unavoidable business expense no doubt.
Under the Australian Stock Exchange Guidance Regime on Continuous Disclosure, Section 91 states: "Listing rule 3.1 provides examples of information that, if material, would require disclosure. One of those examples is a change in the entity's previously released financial forecast or expectation.
"As a general policy, a variation in excess of 10 per cent or 15 per cent may be considered material, and should be announced by the entity as soon as the entity becomes aware of the variation."
Of course, Qantas could not be accused of any naughtiness whatsoever, let alone spin, but it seems there must have been some kind of oversight.
At the beginning of December last year analysts were forecasting a first-half net profit of roughly $300 million for the poor, near dead creature. Little wonder, as the company had ruefully disclosed to the ASX and the press last year how terrible things were.
Yesterday, though, the scurvy beast handed down a profit well in excess of 10 per cent to 15 per cent of that $300 million mark.
Sadly, there's more. For in December analysts mystically began lifting their forecasts after a Qantas briefing.
The mums and dads weren't told of higher numbers, so we can only imagine the changing forecasts were the result of ... magic.
Far be it for your blushing scribe to impugn the integrity of Qantas's governance. It is a far more reasonable explanation that the research community - analyst by analyst - concluded that the profit would be around the $313 million mark. Then they individually began lifting their numbers again only this month and last. Sheer wizardry!
This - divination, that is - must be the only explanation.
Qantas could surely not have countervailed the deliberations of the Australian Securities and Investments Commission on "selective briefings".
Selective briefings are when a company tells favoured analysts working for large stockbroking companies (with very fine views of the Yarra or Sydney Harbour) some material information that is not readily available to the rest of the market.
Then these analysts tell their major clients, such as superannuation funds, the story in order that their clients might gain advantage by trading on this information, make bucketloads of money and remit the favour to the analysts via commissions.
ASIC has admonished both AMP and Southcorp for giving selective briefings. But we can't imagine that Qantas would possibly divulge price-sensitive information to select parties. Not on your nelly.
A few other observations. Qantas is clearly going gangbusters and is on track for a record year.
Shareholders should be pleased.
Yet despite the headline numbers, EPS was actually down 5 per cent, from 21c a share to 19.9c due to dilution of shares.
Looking at the result from domestic aviation - EBIT up 64 per cent to $324 million - one might construe that Virgin Blue, too, is making a killing and printing money.
==============================================