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post Posted: Jul 7 2005, 11:26 AM
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London winning the Olympics bid should be good news for Multiplex and other UK builders.
I'm expecting the stock will be upgraded by analysts in the weeks to come. Let's wait and see.

early birds
post Posted: Jul 7 2005, 11:16 AM
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In reply to: Techno on Thursday 07/07/05 10:52am

Something for you Thechno.

Multiplex shares fell 3.6 per cent to $2.94 yesterday after property trust analysts revised downwards by a further 10 per cent their 2004-05 profit forecasts, to reflect more unexpected, one-off payments out of earnings.

Brokers said the company's recent profit forecasts did not include an estimated $16.5 million payment to holders of Multiplex's listed SITES, which are interest-bearing securities that convert into normal securities.

Once brokers read the fine print they identified further payments for the preferred stock distributions which will leave profit closer to $133 million.

It was enough to wipe 11c off the price of Multiplex's securities.

The company warned on Friday that its 2004-05 profit, would be down by about $20 million, taking it to about $150 million, due to timing problems of bringing certain projects' profits to account.

A spokesman for Multiplex said the 2005-06 year would rise by a corresponding $20 million, although counting the extra SITES payments, that figure will also decline.

Multiplex's recent profit guidances were for net profit before taking into account distributions for SITES.

Goldman Sachs JBWere's Nick Vrondas said on reviewing the company's May guidance: "We believe that our NPAT forecasts (and most of those in the market) have overestimated earnings.

"This is due to the basis of the guidance being before preferred stock distributions and without regard for the additional funding costs of Duelguide [which Multiplex jointly bought with Westfield last year].

"We have downgraded earnings per security by a further 10 per cent for the 2004-05 year. These forecasts suggest that there remains a very poor level of profitability out of the corporation. Even after allowing for IFRS [new international reporting standards] impacts, the returns and margins implicit in these numbers are very poor. We retain our sell recommendation."

Credit Suisse First Boston's analysts also cut their 2004-05 profit figure saying, "just when we thought Multiplex's disclosure and transparency was improving, we discover this".


and sp is up from yesterday, HA

post Posted: Jul 7 2005, 10:52 AM
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Also from London:

Curse of Wembley strikes again

Two sports ministers, the chief executive of the FA and the chairman of the stadium development company have all lost their jobs over the continuing saga that is Wembley. But the Multiplex founder's loss is the greatest of all, reports Steven Downes

So, the Curse of Wembley has claimed yet another victim. In Australia today, John Roberts, who founded construction firm Multiplex 43 years ago, was forced to stand down as executive chairman as the company was forced to admit that its losses on the benighted project would be at least £20 million.

Mr Roberts is in good company.

The Curse of Wembley might first have been detected in the mid-1990s, affecting Sir Brian Wolfson. During his reign as chairman of Wembley plc, the company which operated the old stadium and owned the site, Sir Brian had to deal with many of the costly business problems one might expect from running a dilapidated sports venue that, instead of being "the Stadium of Legends" of repute, was more often regarded as the stadium of fag-ends.

But at least the plc managed to sell off the site for £120 million of Lottery cash and Sir Brian got out with his reputation reasonably intact.

Not so Kevin Keegan, whose last match as manager of the England football team was an ignominious defeat against Germany, in the final game played at the old Wembley.

Sports ministers Chris Smith and Kate Hoey later lost their jobs, largely because they were unable to pull together the disparate interests of the numerous sports bodies who laid claim to a stake in the new National Stadium.

And even when one sports body, the Football Association, took on principle responsibility for the project, its chief executive, Adam Crozier, paid for the move with his job, as his board grew squeamish about the mounting costs.

It should not be forgotten that the new Wembley was conceived as a multi-sport, multi-purpose 100,000-seater venue which was to be the centrepiece of London’s Olympic bid, and was to have staged its first major event in 2003 with the world athletics championships.

Ken Bates, the colourful hotelier and property developer and then owner of Chelsea, was the man appointed by the Football Association to head up Wembley National Stadium Ltd once the site had been bought for the nation.

Mr Bates made short work of kicking out what he saw as expensive elements of the project – such as the running track – and instead introduced schemes for lavish hotel and conference facilities that saw the development price soar at one point to approaching £1 billion. It should be noted that in the time it took to discuss what might be included in the Wembley Stadium redevelopment, the Millennium Stadium in Cardiff was planned, designed and built, and all for £110 million.

It was Mr Bates, during his time in charge, who appointed Multiplex as contractors. It was to be the Australians’ first project of such scale in Europe, although they had built Sydney’s Olympic Stadium.

Multiplex clearly got the contract on price, as British contractors shied away from the irksome project and none believed it could be delivered for less than £650 million. Multiplex (who coincidentally at the time had offices at Stamford Bridge, the home of Mr Bates’s Chelsea, where they were building a new stand), said that they could build the new Wembley for just £500 million. There were gasps of disbelief from their rivals.

Yet even after delivering such a favourable deal, Mr Bates was not immune from the Curse of Wembley, as he soon lost his position with the FA, famously accusing his detractors as he left, saying, "Even Jesus Christ suffered only one Pontius Pilate - I had a whole team of them."

Mr Bates’s Wembley vision was thereafter stripped of some of its more expensive elements, such as the hotel.

But even with the pared down version, today Multiplex was forced to admit that it would not be able to deliver Wembley, at least in terms of cost, as it anticipates a costs overrun of at least £20 million. Whether they deliver the stadium in time for next year's FA Cup final remains moot.

The hit to Multiplex's bottom line saw the company suspend its stock from the Sydney exchange earlier today after seeing its shares lose some 42 per cent of their value so far this year – equivalent to A$2 billion in total.

Poor old Mr Roberts. Not only has his shareholding been hit and his job been lost, but his family has even guaranteed to cover Multiplex’s losses on the project of up to £20 million. Maybe this was one contract that Multiplex could have done without winning.

post Posted: Jul 7 2005, 10:50 AM
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From London:

Wembley losses could increase 'significantly'
By Rhys Blakely, Times Online 30/5/05

Multiplex, the Australian construction giant, today announced the resignation of executive chairman John Roberts after revealing losses from its troubled Wembley Stadium project in London may be "significantly" higher than previously thought.

Multiplex sought a halt to trading in its shares in Australia. The stock has lost more than 40 per cent since the start of the year, when it traded at A$5.44. It last traded at A$3.26.

The Wembley Stadium development has been fraught with difficulties and controversy from its conception more than a decade ago. Mr Roberts, who founded Multiplex in 1962, is its latest casualty.

Multiplex today refused to confirm if the £500 million project in north London would still be completed on schedule by January. But a spokesman said the group expects to meet its contractual obligations which state that the stadium should be ready by April to host the 2006 FA Cup final.

In February, Multiplex warned that it would not make a profit on the project. Today the company announced losses on Wembley could exceed £20 million.

Multiplex said it had requested the suspension because of the possibility of a loss "significantly greater than that which would be covered" by a A$50 million (£20m) indemnity provided by the Roberts family.

The company's board is expected to hold a series of emergency meetings this weekend which analysts believe could could to a profit downgrade when it provides a further update on Monday.

The group said it was undertaking a review of key aspects of its operations to provide, by the end of May, market guidance on earnings for the 2006 fiscal year and also an update on 2005 earnings.

Mr Roberts, whose family is a key shareholder in the group, remains on the board while deputy chairman Allan McDonald, an independent director, becomes non-executive chairman.

Mr Roberts' resignation was announced as Multiplex said it had received an internal report indicating that the margin position on its Wembley Stadium upgrade project "may have deteriorated significantly".

In addition to the departure from the board of Mr Roberts, executive director Noel Henderson has also stepped down.

Multiplex said it hoped to appoint a new independent director, preferably with property experience in Britain.

The Wembley Stadium project has been plagued with contractual disputes and speculation over whether it will be finished on time.

The project has also been hit by rising costs associated with steel and jobs such as painting and tiling.

post Posted: Jul 1 2005, 12:29 PM
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In reply to: fastenyourseatbelt on Thursday 30/06/05 12:40pm

Wonder what is fuelling it?...

I've been a holder for a while and love the momentum

... any one??? king.gif

post Posted: Jun 30 2005, 12:40 PM
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Trending up nicely lets hope it continues! wink.gif


Share Cafe Sentifi Top themes and market attention on:

post Posted: Jun 21 2005, 01:56 PM
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Goes ex-dividend on 24th june; 14c pay-out on $2.80 share price looks attractive under the circumstances.

post Posted: Jun 9 2005, 11:45 AM
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The problem facing investors is can you believe management that Wembley is the only problem project and will its loss be in line with management's forecast? The answer won't be known until Wembley is finished. One thing in favour of Multiplex projects is that steel prices are falling quite sharply.

At current price levels the market is ascribing zero value to its construction and development business. The property trust has a net asset backing of $2.60 per security and that is putting a floor on the share price.

Rumour (from AFR) has it that Chris Wyllie sold half his stake last year at around $5.70 and has now bought back about $8 million worth. He is a one smart operator and probably knows what he is doing. He's the chap who was buying Burswood shares cheap a couple of years ago, before it got taken over by PBL.

post Posted: Jun 4 2005, 03:01 PM
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im pretty sure this company would have gone under if it did not take over Ronin last year. The positive cash flows from Ronin is propping up the construction arm of the company now.

post Posted: Jun 1 2005, 08:29 PM
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In reply to: budakajana on Tuesday 31/05/05 09:15pm

Heres an article from todays

Is Multiplex the next Mainline?

By Glenn Dyer

There's a joke circulating that won't amuse nervy investors worried about property and developer stocks. How do you spell Multiplex? M-a-i-n-l-i-n-e.

Mainline collapsed in 1974, precipitating the credit squeeze and property collapse triggered by the inflation-first policies of the Whitlam government. On one day, Westpac (then the Bank of NSW) had to go into the money markets for cash and paid more than 20% for overnight funds, and a host of building societies in Queensland and NSW suffered runs, and some collapsed.

Of course it's premature to compare Multiplex with Mainline, and our financial markets are deeper and much stronger than they were 31 years ago. But there's still a worry. More than 201 million shares in Multiplex changed hands yesterday – 35% of Multiplex's issued capital of 568 million shares. The price fell 72c to $2.54 at the close yesterday and recovered 6c to $2.62 this morning.

Banks were weaker yesterday, which partly reflected some reweighting ahead of global index changes and also some nervousness about exposure to Multiplex. In yesterday's trade the ANZ lost 50c, CBA 48c, NAB 44c and Westpac 34c. The quartet were sold off by nervy investors because of worries about their funding, especially the ANZ which has a $600 million exposure to Multiplex.

We haven't been through a significant property slump or crash since the likes of Estate Mortgage and Pyramid collapsed 15 years ago. But one thing is certain: when a big company is in trouble everybody runs for cover because they are afraid of being hurt in the collapse.

Multiplex has a tame in-house property trust, and there's a lot of co-mingling of money between the two entities. That makes for added complexity, especially when the trust has lent a whopping $770 million. How is that money secured? Is is callable in any way? Is this sum so large because Multiplex hasn't been able to borrow from the banks except at high interest rates?

The company says it has $200 million in cash and $600 in credit lines: with $770 million owing to the trust, there's not much left over is there if forced asset sales are required.

This is not a bottom draw stock. This is a stock you take to the grave with you.

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