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Rams

Discussion in 'Shares' started by Ems, 10th Dec, 2007.

  1. Ems

    Ems Member

    Joined:
    15th Mar, 2007
    Posts:
    20
    Location:
    QLD
    Hi All,

    I have been reading a bit about Rams and their future projections and am considering buying some shares.

    Has anyone else been tempted by the low share price or would you consider it a No no?
     
  2. handyandy

    handyandy Well-Known Member

    Joined:
    6th Jun, 2006
    Posts:
    312
    Location:
    Sydney Nsw
    Rmas will become 2 businesses.

    The original Pams RHG will be the listed company which will no longer be allowed to operate under the Rams brand and will have no further business writing new loans.

    The ongoing Rams the business brand and all retail outlets will be wholly owned by Westpac with no connection to the publically listed company. The money that Westpac has paid for this business will be used to pay income tax and debt so no distribution to the shareholders.

    As such the only ongoing income that RHG will have is the current loan book (ones its been refinanced) with no ability to expand the loan book. As such the only value in buying the share is the projected income from the outstanding loans. These loans will no doubt be under financial pressure through refinancing by the ongoing concern as the current Rams clients will not understand that their loan is no longer serviced by their friendly Rams branch.

    Personally I have not seen any projections of earnings against the loan book so even a cheap price might not be that cheap.

    Cheers