CABCHARGE AUSTRALIA LIMITED (CAB)



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General Information
Company Name: Cabcharge Australia Limited
Stock Code: CAB
Website: www.cabcharge.com.au
GICS Sub-Industry: Data Processing Services
Market Cap ($M): 473
Equiv. Shares (M): 120

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 3.930 $ 3.940 $ 3.940 $ 3.875 $ 3.930 198,574 0%

Current Broker Consensus Recommendation more
Recommendation: Sell
Recommendation Date: 26th Feb 2014
12 Month Target Price (average): $4.03
Brokers Surveyed: 5

Company Overview

Business Description:
Cabcharge Australia Limited (CAB) is a diversified Australian technology, financial services, taxi payments and passenger land transport Company. It also develops and manufactures in-taxi equipment through its associate company; ComfortDelgro Cabcharge Pty Ltd. CAB also provides bus and coach services to customers predominantly in Australia.

Strategy Analysis:
Cabcharge hopes to maintain a dominant position in the taxi industry through ownership of a state of the art, information and technology network. The network is used primarily for electronic settlements and as a comprehensive payment management tool. Maintenance of leading edge technology means helps CAB defend its position against new entrants to the taxi payments system. National growth initiatives include the planned growth in taxi plate licenses by state governments. This will have a direct impact on the potential number of Cabcharge transactions as the result of an increased number of taxis on the roads. Fares are increased periodically as the State Governments review fares to allow for movements in fuel and other costs. Merchant fees may possibly be negotiated and a general switch by consumers from cash to credit transactions works in favour of CAB operations. CAB is expanding its presence in the UK market through a joint venture arrangement. The UK expansion is still in its infancy and earnings performance has been poor given the weak economic environment. The CDC bus joint venture has seen increased patronage as economic stress pushes more passengers onto buses and services are expanded, particularly in high growth regions. There is the risk that CDC loses Region 4 through NSW government tender, but we think CDC is in a strong position to retain them, albeit at tighter margins. Cabcharge Australia reported NPAT up 28.5% to $33.34m for the half-year ended 31 December 2012. Revenues from ordinary activities were $99.77m, up 1.2% from the same period last year. Basic and Diluted EPS was 27.7 cents compared to 21.5 cents last year. Net operating cash flow was $29.35m compared to $27.94m last year. The interim dividend declared was 18.0 cents compared with 17.0 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 58.5 48.6 -2.8 8.1 28.0 7.1 100.0
2014  F 60.2 50.0 -9.2 7.9 28.0 7.1 100.0
2013  A 66.3 55.1 0.3 8.9 30.0 6.1 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Cabcharge (CAB) $470 M 0.0027 -0.0329 -0.0863 7.0896 7.3308 8.0230 0.0769 0.0718 0.0661

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
CAB 0.51 7.34 1.40 10.00 2.41
Market 1.09 15.9 1.26 2.00 1.69
Sector 0.90 12.9 1.27 2.60 0.66

Directors
Name Position Start Date
Mr Reginald Lionel Kermode Chief Executive Officer,Executive Chairman 27 July 1980
Mr Ian Alexander Armstrong Non-Executive Director 17 July 2000
Mr Donnald Stuart McMichael Non-Executive Director 25 June 1996
Mr Phillip James Franet Non-Executive Director 28 June 1985
Mr Russell Balding Non-Executive Director 06 July 2011
Mr Neill Douglas Ford Non-Executive Director,Interim Chairman 21 March 1996

Management
Name Position
Chip Beng Yeoh Company Secretary
Andrew Skelton Company Secretary
Sai Kancharla Deputy Chief Financial Officer
Fred Lukabyo Group Chief Operating Officer - Taxi Operations
Rob Roozendaal Group General Manager - Information Technology
Anne Rein Group General Manager - People and Business Improvement

Substantial Shareholders
Holding Name
8,980,676 (7.46%) Nefco Nominees Pty Ltd
14,856,477 (12.34%) BNP Paribas Noms Pty Ltd
15,143,598 (12.57%) J P Morgan Nominees Australia Limited
14,122,054 (11.73%) National Nominees Limited
12,686,066 (10.53%) HSBC Custody Nominees (Australia) Limited

Calendar of Events
Date Event
24 February 2015 Report (Interim)
17 October 2014 Report (Annual)
21 August 2014 Report (Prelim)
30 April 2014 Div Pay Date
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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