v2 Report
WID Widespread Portfolios Limited

Commentary: Widespread Portfolios Limited (WID) is an investment company that for the most part invests in mining companies. By far its biggest asset (% of portfolio) is its investment in Asian Mineral Resources (ASN.V); a mining company listed on the Toronto stock exchange with its main activity being the development of the proposed Ban Phuc nickel mine in Viet Nam. There is a certain degree of event risk associated with this as the project is currently awaiting final approval - which if granted will allow the mine development to go ahead. A lot of preparation for this has gone on so basically it will be all go from the OK. If the OK is given the price of ASN should jump, and given it comprises some 75% of WIDs portfolio - so too should WID and the warrants WIDWA.

Aside from the ASN investment WID also has holdings in other mining companies such as King Solomon Mines, which represents about 9.1% of WIDs portfolio. Of interest with the current currency climate is that the majority of the assets of WID are denominated in foreign currency which in recent times has been a bad thing with the NZDUSD hitting staggering levels including a high of 81 cents. However the broad consensus is for a medium to long term fall in the NZD (with the eventual easing of the OCR), so WID would provide strategic positioning for NZD based investors.

Looking at the income statement of WID does not bring inspiration, but then it is an investment company whose focus should be on growing net assets (adjusted for capital raisings). With this in mind, looking at the statement of financial position it would seem that this is indeed occurring with a 30% compounding growth rate over the past 4 years (unadjusted). One of the key metrics to look at for WID is the price to net assets ratio (P/NA); most investment companies trade at a discount to net assets for a variety of reasons such as risk, costs, liquidity etc. Typically a company will trade at a more or less "normal" discount to net assets, so entry and exit timing can be made in accordance with this e.g. selling when P/NA is high and vice versa - whether such a strategy works is beyond the scope of this commentary. 

All in all this company provides exposure to the mining sector, and speculative potential via the ASN holding. It also provides the potential to position oneself for any declines in the NZD - however in terms of the markets it also presents high exposure to the Nickel market, and commodity markets in general. For more aggressive speculators entry via WIDWA would be worth looking at due to the leverage factor (WIDWA are warrants and require only a fraction of the price of WID for the same amount of exposure).

by Callum Thomas
1-September-2007

Website:  http://www.widespread.co.nz/

Recent announcements: click here

IPOs and Investment Opportunities

Financials 
 

Statement of Financial Performance
	2007	2006	2005	2004
Revenue
Sales	-	-	-	-
Interest received	-	-	-	-
Other	38,000	2,891,000	64,000	702,000
Total Revenue	38,000	2,891,000	64,000	702,000
Expenses
Cost of sales	-	-	-	-
Other expenses	620,000	389,000	368,000	911,000
EBITDA	(582,000)	2,502,000	(304,000)	(209,000)
Depreciation	-	-	-	-
Amortisation	-	-	-	-
EBIT	(582,000)	2,502,000	(304,000)	(209,000)
Interest expense	-	-	-	-
Taxation	(184,000)	416,000	-	-
NPAT	(398,000)	2,086,000	(304,000)	(209,000)
Statement of Financial Position
	2007	2006	2005	2004
Assets
Current Assets
Bank and cash	69,000	855,000	80,000	132,000
Receivables	52,000	40,000	3,000	2,000
Inventory	-	-	-	1,693,000
Other	2,612,000	3,113,000	2,261,000	-
Total Current Assets	2,733,000	4,008,000	2,344,000	1,827,000
Non Current Assets
Property Plant & Equipment	-	-	-	-
Investments	17,174,000	6,813,000	5,081,000	5,015,000
Goodwill & Intangibles	-	-	-	-
Other	-	-	-	-
Total Non Current Assets	17,174,000	6,813,000	5,081,000	5,015,000
Total Assets	19,907,000	10,821,000	7,425,000	6,842,000
Liabilities
Current Liabilities
Payables	44,000	216,000	21,000	68,000
Short term borrowings	337,000	441,000	-	-
Other	-	-	11,000	-
Total Current Liabilities	381,000	657,000	32,000	68,000
Non Current Liabilities
Long-term Borrowings	-	-	-	-
Other	-	-	-	-
Total Non Current Liabilities	-	-	-	-
Total Liabilities	381,000	657,000	32,000	68,000
Net Assets	19,526,000	10,164,000	7,393,000	6,774,000
Statement of Cashflows
	2007	2006	2005	2004
Cash flows from operating activities
Operating revenues	1,705,000	1,603,000	294,000	862,000
Operating expenses	2,683,000	1,856,000	926,000	305,000
	(978,000)	(253,000)	(632,000)	557,000
Cash flows from investing activities
Inflows	107,000	-	14,000	24,000
Outflows	3,000	16,000	100,000	964,000
	104,000	(16,000)	(86,000)	(940,000)
Cash flows from financing activities
Inflows	88,000	1,044,000	666,000	-
Outflows	-	-	-	-
	88,000	1,044,000	666,000	-
Net Increase (decrease)	(786,000)	775,000	(52,000)	(383,000)
Opening cash	855,000	80,000	132,000	515,000
Closing cash	69,000	855,000	80,000	132,000
	Analysis
Per share figures
Dividend/shares	-	-	-	-
NPAT/shares (EPS)	(0.00)	0.00	(0.00)	(0.00)
EBITDA/shares	(0.00)	0.01	(0.00)	(0.00)
Net Assets/shares	0.02	0.02	0.02	0.03
Profitability
ROA	-2.00%	19.28%	-4.09%	-3.05%
Equity multiplier	1.0	1.1	1.0	1.0
ROE	-2.04%	20.52%	-4.11%	-3.09%
ROavgE	-2.68%	23.76%	-4.29%	-
Net profit margin	-1047.37%	72.15%	-475.00%	-29.77%
Liquidity
Net working capital	2,352,000	3,351,000	2,312,000	1,759,000
Current ratio	7.17	6.10	73.25	26.87
Quick ratio	7.17	6.10	73.25	1.97
Working capital ratio	0.12	0.31	0.31	0.26
Capital structure
Debt to equity	0.02	0.06	0.00	0.01
Interest coverage
Shares	932500000	420000000	325996000	263152180
Dividends paid
Dividend payout ratio	0%	0%	0%	0%
Growth rates
Revenue	-98.69%	4417.19%	-90.88%
EBITDA	-123.26%	-923.03%	45.45%
NPAT	-119.08%	-786.18%	45.45%
Total assets	83.97%	45.74%	8.52%
Net assets	92.11%	37.48%	9.14%
g = (ROE*(1-DPR))	-2.04%	20.52%	-4.11%	-3.09%
Other
Share price (30-August-07)	$           0.02	Avg 4 yr growth rate (NPAT)		-286.60%
Market cap	$ 15,852,500	Cmpdg 4 yr growth rate (NPAT)		17.47%
Enterprise value (EV)	$ 16,233,500	Avg 4 yr growth rate (NA)		46.24%
EV/EBITDA	-27.89	Cmpdg 4 yr growth rate (NA)		30.30%
P/E Ratio	-39.83
P/NA ratio	0.81
Dividend yield	0.00%
Earnings yield (E/P)	-3%

Trading over the last year

Other

Last updated: 14-11-2007

Company balance date: 31 March

 

Supplementary Information

Note: Trades before the company listed in January 2004 were managed by the company and were usually transacted at a 10% discount to the NTA per share at the time of the transaction. "Market" prices for periods commencing prior to January 2004 have been calculated on this basis. All returns are issue adjusted. The increase in NTA per share is the compounded rate of return on investment (equivalent to IRR or internal rate of return).

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