Finance Blog

Starting the Season

2008-07-17T04:58:00.001-07:00

This weekend marks the start of the wedding season. I think of a better way to do it than with two weddings - one at The Curtis Center and the other at Glen Foerd Mansion. These are two of our favorite places to film. And then we have the Trash the Dress on Sunday with the 6 great photographers.

I'd say we're hittin' the ground running in 2008.

And we are really looking forward to a great wedding season. I have had the opportunity to meet with so many great couples this past year and hear so many creative ideas to make their weddings unique. I think we're going to end up with some of our best work to date.

Retailers call for cut in card charges

2008-07-16T13:58:00.001-07:00

EAST of England businesses have joined national retailers in calling on banks to reduce their “prohibitive” plastic card charges as a survey revealed more than half of transactions are still in cash.

The British Retail Consortium (BRC), which carried out a “cost of collection” survey, has claimed there is a drive by plastic card issuers to kill off cash, and condemned it as a “self-serving attempt to rake in millions more in charges”.

The BRC said customers did not realise the “huge” sums retailers were charged for processing card payments.

On average, a £20 cash transaction costs a retailer less than four pence, while a £20 credit card transaction costs at least 17 pence, it claimed.

Collecting all payments, including cash, cards and cheques, cost retailers £317million last year, with processing of credit card payments accounting for 51% of that, even though they represented only 22% of sales turnover, it said.

BRC director general Kevin Hawkins said: “Banks have long abused their position by imposing much higher charges on retailers for processing card payments than cash. Clearly the banks have spotted that replacing cash with cards would mean a further boost to their profits.

“Retailers are not opposed in principle to cards taking a bigger share of the payments market, but as they try to accelerate that process, the banks should acknowledge their card charges are too high. There should be a lower, fixed fee per transaction which actually reflects the costs of processing.”

David Burch, East of England policy officer for the Federation of Small Businesses, said the charges were “extremely prohibitive” for retailers.

About 23% of their membership in the region was made up of retailers, and most of them supported a range of payment options, he said.

“Most of them wish to see as wide a range of payment options as possible,” he said.

“We would also welcome a reduction in charges for the use of these cards because they are extremely prohibitive to retailers.”

Around 70% of their East of England FSB members still relied heavily on cash and cheques to receive and make payments, he added.

Andy Rayner, a member of Suffolk Chamber of Commerce said the issue affected retailers more when they were small businesses.

“For a small, independent business that could certainly hurt you,” he said. “The banks have had it in a lot of ways their own way for many years.”

He called for all costs to be looked at and reduced accordingly.

“It's all about being fair. Everybody has to earn a living and everybody has to make a living in business,” he said. “What we are trying to do as retailers is to offer as many ways to pay as possible. Because you want to make that sale in a lot of ways you swallow that cost.”
Link

IPO Update: Transformers & Rectifiers India Limited

2008-07-16T08:57:00.001-07:00

Transforming the power equation

TRIL has entered the capital markets with a public issue of 29.95 Lac shares of Rs. 10 each at a price band of Rs. 425-465 per share through book building process. Investment Guru is of the view that Power transmission and distribution is an integral part of the power sector’s growth story and Transformers play a pivotal role in this process. TRIL is one of the major players in this segment.

However, in this case too the promoters have not left much on the table for the investors as similar companies are available at same valuations in the secondary markets. One can apply for the issue with a view of moderate listing gains on listing. However, from a medium term perspective investment in peers such as Indo-tech transformers is also advisable as the company is operating on better margins.

Let’s take a look at the company

TRIL is one of the major players in the Indian markets manufacturing a wide range of transformers ranging from power generation, transmission and distribution transformers, industrial transformers and a wide range of speciality transformers.

TRIL manufacture transformers upto 220 kV Class, having an installed capacity of 7,200 MVA transformers per annum.

The company currently operate through two manufacturing units, located at Changodar, near Ahmedabad and Odhav, in Ahmedabad, both in Gujarat

Key customers include utilities and power transmission companies. The company has also exported transformers to countries such as the England, Canada, United Arab Emirates, South Africa, Saudi Arabia and Indonesia.

Company’s business strategy is to focus on manufacturing of high capacity transformers at the proposed manufacturing facility at Moraiya since high capacity transformers command better margins.

The company intends to leverage its relationships with the power transmission companies to take up turnkey projects for setting up sub stations.

TRIL has a healthy order book position of Rs.319 crore as on September 1, 2007 with most of the contracts having an embedded price variation clause, shielding the company from adverse movement in prices of key raw materials like copper and steel. TRIL has strong in- house design capabilities which is a key success factor for this industry as transformers are custom built as per the requirements of the customer.

CARE has assigned a 'CARE IPO Grade 4' to the IPO which indicates above average fundamentals.

Power transformers constituted 77% of total sales of the company in FY07 followed by furnace transformers (13%) and others (10%). Sales to State electricity utilities constituted 51% of total sales of TRIL for FY07 with the remaining to industrial and other sectors.

During FY07, TRIL's total income grew by 69% over FY06 on account of increase in sales volume as well as per mva realisations. The company was able to sell higher mva (80 and above) transformers in FY07 as compared to FY06, where margins are better.

TRIL's PAT margin also improved to 7.99% in FY07 as compared to 5.8% in FY06. ROCE and RONW were high at 62% and 54% in YQ7 as compared to 42% and 43% in FY06 respectively.

EPS for the six months ended September,2007 (annualized) is Rs. 20.4 (post issue equity) which translates into a PE multiple of 23.

Return on Net Worth is 41.36 % for FY07.

Issue Opens : December 7, 2007
Issue closes: December 12, 2007
Registrar: Intime Spectrum

Click here to check IPO Allotment Status of TRIL

EntreCard Credits for sale at eBay - Batch #2

2008-07-16T03:58:00.001-07:00

After my successful (and profitable) sale of EntreCard (EC) Credits at eBay, I'm at it again. This time, I auction 4,500 EC Credits at eBay with starting price at USD8.15. This is very cheap considering that EntreCard.com themselves is selling the EC Credits at USD9.50 for 1,000 EC Credits. Hopefully, the bids on the auction pickup in the next few days.

For non-EntreCard members, EC Credits can be use to advertise on mega site without paying them with real cash. You trade your EC Credits for a space on their front page. And that process may bring in more visitors to your site. In a mega site, some charge a few hundred dollars daily or month but some of those site is willing to allow you to advertise on their site in exchange for a few thousand EC Credits. Thus, advertising on those site with EC Credits is much more economical.

Below are EC Credits for sale by EntreCard owners:

1000 Entrecard Credits - USD$9.50

5000 Entrecard Credits - USD$47.50

EzRich Project Updates:
* Jun 14, 2008: Making real cash with EntreCard credits - Part 2

Related posts:
* Making real cash with EntreCard credits
* How to make money with EntreCard Credits
* List of EntreCard Credits for sale at eBay

EntreCard Credits being auctioned at eBay