Reliance on coal a key factor
THE price range for the QR National Share Offer is between $2.50 and $3.00 a share, with individual investors to pay no more than $2.80 per share.
“This is an opportunity for Queensland mums and dads to be part of a dynamic top 50 ASX-listed company based right here in Brisbane,” Premier Anna Bligh said.
Capricorn Investment Partners managing director David French said looking through the prospective QR had got massive leverage to volumes of revenue.
“What the financials show in 2011 is a 16 per cent increase in revenue gives a 42 per cent increase in gross profit,” Mr French said.
“And in 2012 an 11 per cent increase in revenue gives it a 23 per cent increase in gross profit.”
QR National operates in five Australian states, transporting more than 260 million tonnes of coal, iron ore, other minerals, agricultural products and general freight in the 2010 financial year.
“The interesting thing is that the revenue is based on the tonnage of coal, not the coal price, and companies are reluctant to reduce their output even if the coal price falls,” Mr French told the Observer yesterday.
“So QR’s exposure to a decline in the coal industry is probably limited and that’s the issue. Are the volumes of coal likely to stay up where they are now and, if the answer is yes, it is probably a good buy and if it’s not it could get a bit ugly.”
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