Remember Xebec's post on March 15th?About the partnership with Coregas? The market blew it off.
Coregas is a subsidiary of Wesfarmers. Wesfarmers bought it for $500 million on February 1'st 2007.
While Wesfarmers isn't a familiar name, because it's on the other side of the planet, it's one of the largest private-sector employers in Australia, with 107,000 employees and 487,000 shareholders. It's a big conglomerate.
Last night I read the annual report. I wouldn't recommend it. It's 92 pages. Wesfarmers owns Kmart Australia and Target Australia, as well as a number of other companies. Last year its revenues were $30.8 billion. Its net profit from continuing operations was $2.1 billion, (up 8%), its ROI was 22.1%, and its free cash flow was $5.188 billion. It pays a 3% dividend, and its stock hit an all-time high in the Australian market today.
It is a very socially conscious organization. Fully 7 pages of the report discuss how the company is addressing climate change, and how it intends to reduce its CO2 emissions.
The market didn't react to that news at all. In fact, the stock was down 62 cents, or 11.4%, to close at $4.84 that day. Very likely because that news was announced on the Monday following Friday's earnings revision bombshell.
The implications for Xebec of this partnership are potentially far more significant than the market appears to have discounted. The potential synergies here are enormous.
If I have any more insights on this subject, perhaps I'll share them with the inner sanctum.
I'm getting tired of false accusations from people that don't know me, and question my motives, disparage me, and who contribute nothing here. Like HonestAl before me, and a few others. I have plenty of names of people who contribute. Together, we could make quite a forum of our own. You know who you are.