There was not as much detail in the press release as I would like. Consequently it forces me to speculate much more than I would like.
It looks like sales are down (again), and taxes are up (again, as Noble no longer have the same tax breaks). But their margin has improved, and that helped their earnings improve slightly over last year (52 cents over 50 cents).
The press release states that: "future growth in shareholder value will come thru .... optimizing the performance of the Zhaoqing Noble Brewery." Noble has already optimized this brewery a lot over the years, ... how much more improvement can be obtained in margin??
I also see Noble purchased only 1/2 of their approved 865,000 shares (at $3.25) even though the share price fell below that level. That makes me curious, ... that could be good or could be bad news. The bad view would be Noble expects a further share price drop, and wants to keep its cash. The good view would be Noble expects to have better use for its cash than buying back company shares.
The write down was not unexpected, and not as bad as I thought it would be. But does this write down confer tax breaks to Noble?? There is no mention of that.
And the exclusive 30 year rights to produce Pabst Blue Ribbon in China is still good news, but there is no detail on how Noble intends to market/licence those rights to generate more income.
So, the questions I have, which are not answered in the press release are:
(a) even though Noble's interest in the Northern breweries have been written off, does Noble retain any responsibility to the breweries, ... i.e. are the breweries considered discontinued operations, and does Noble have to report and further losses from discontinued operations?? What is the process here [i.e. is Noble still liable??]
(b) does Noble get a tax break from these losses in future years?
(c) what is Noble's current cash position? And what is Noble's current book value??
(d) How does Noble intend to obtain "future growth in shareholder value ... through maximizing the potential of the Pabst Blue Ribbon Brand"?? [J.Pennal's words]. i.e. Is there a business plan to licence the beer to other breweries??
I doubt that the share price will fall much, as it has been suffering for years with this type of news. And given todays market, it could leap "for joy". Then again, there could be no market reaction at all.
All IMHO, of course! |
