Cash Flows On Radio Waves

The Sunday Age

Sunday July 27, 2008

Christopher Webb

RON Hall, who presides over such businesses as Going Going Green and Supply and Demand, is seeing some light at the end of the tunnel with Pacific Star Network.

Pacific Star, which operates radio stations 1116SEN and 3MP, was cash flow positive in the June year - the first time in its history.

Ninety-nine grand was the figure in black ink, and that compared with a $2.6 million deficit for the previous year.

Receipts from customers were up 41% to $11.3 million and Ron reckoned the result was a "milestone in the company's history and transition to profitability".

His stake in the company recently increased to 19% after the sale of some shares by the Herszberg family.

The scrip last fetched 3 cents.

Cooper hits out

PETER Cooper, who looks after $4 billion of other people's money, reckons an insidious trend has emerged lately that makes Australia risk looking like a Third World entity.

He singled out government intervention or regulation that was unnecessary or was ill thought out with no rational economic basis. He included the revocation of prior promises or the imposition of new taxes.

Cooper listed a string of government actions. Included was the termination of the OPEL telco consortium agreement, Medicare rebate changes, mandating of gas for domestic use in WA, an increased royalty tax on coal in Queensland, the Brumby Government's gaming licence changes, the revocation of the north-west shelf rebate and the tax on alcopops.

Cooper concluded that regulatory risk inherent in investing in companies in any sector had risen substantially and that further areas of risk included Telstra and the fibre-to-the-node project, and futile industry assistance in the auto sector.

Cooper has been on the receiving end of one of the above; the value of his Cooper Investments' stake in Tatts Group was slashed in the June quarter.

Win some, lose some

INTERESTING indeed to watch the goings on at NAB and the on-market share buying by bank heavy, one Ahmed Fahour.

As noted here previously, Ahmed has been a big supporter of the bank's scrip and the pattern that's emerged is that he has bought after the shares have suffered a hefty fall. The scrip has then rallied strongly, only to fall back.

He outlaid $1.4 million in February when he paid $28.73 a share. They then firmed to $34. One month ago he paid $26.85 a share for $537,000 worth of stock. The shares increased to $30.79.

But as of Friday, after the disclosure of the latest lot of horrendous write-offs, the shares were fetching $26.56.

The two lots of on-market buying totalling 70,000 shares cost him an average $28.19.

© 2008 The Sunday Age

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