I’M ON my second glass of a 2002 Leeuwin Estate Art Series Chardonnay.  James Halliday rated the wine a 97, yet I’m not convinced.  Ageing nicely, yes, but the fruit is already fading, and the oak is still too dominant.  Sad, given I could have bought around 130 Gunns shares for the price of the bottle.

Ah, Gunns.  I’ve read the report, spoken to some analysts, and even tried to ring John Gay (he was busy).  I’d hoped to shoot the breeze with John - ask him about the company’s prospects, question whether Gunns has enough accounting grunt to provide accurate statements, and whether I could use his new cellar to house some of my Leeuwin Estate while I build a new mansion.

I’ve also been busy consulting my extensive legal team (who fortunately, accept payment in wine).  It seems while terms like `scumbag’, `lying rodent’ and `trading whilst insolvent’ are acceptable in Parliamentary debate, there is dissent as to whether they can be used in financial analysis to be reported in the media.

Tomorrow, I’ll continue to persuade my legal colleagues that my language is appropriate.  In the meantime, here’s a couple of questions readers of TT may like to put to both Gunns, and the ASX:

1.  In Gunns Limited’s half-year report, earnings per share are stated to be 6.2 cents per share.  My calculations, and those of at least two other analysts put the figure at 3.9.  That’s a serious discrepancy, and if my numbers are correct, Gunns has misled the ASX.  Given EPS is a fundamental measure of both a company’s performance and valuation, this warrants immediate investigation.  Perhaps Gunns’ accountant forgot that more than 300 million new shares have been issued recently, and forgot to update the spreadsheet.  Or perhaps they’ve invented a new accounting standard that Jarvis is as yet unfamiliar with.

2. An analyst’s briefing issued twice on Friday (the second one correcting some sloppy mistakes), included the statement `previous 2009 EBIT guidance of $200 million unlikely to be achieved’.  That’s a serious earnings downgrade, but the media response?  Zip.  All we’ve heard over the last few days is:

‘Gunns announces $33.6 million profit’’ -  Rachel Williams, The Examiner (Rachel, by the way, was spotted sitting next to John Gay at the corporate booth at the Launceston Cycling Classic)
“Mill deal close, says Gunns’’ - Sue Neales, The Mercury
“Gunns first half profit soars 95%’’ - Business Spectator
“Paris Hilton desperate to win back ex lover Benji Madden’’ - Entertainment and Showbiz.

I’m guessing the media are more interested in Paris’s sex life than serious financial reporting, although the Canberra Times at least had a stab at Gunns today.

Tomorrow, when I’ve bribed my drunken legal friends, I’ll provide a full analysis of Gunns report.  Cash and donations of wine to help my research are most welcome (but please, good vintages only please, and nothing from the Hunter Valley).  Linz, take a fair cut, but be reasonable.  I’ll collect on Wednesday morning.

Jarvis
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Jarvis Cocker
1.  In Gunns Limited’s half-year report, earnings per share are stated to be 6.2 cents per share.  My calculations, and those of at least two other analysts put the figure at 3.9.  That’s a serious discrepancy, and if my numbers are correct, Gunns has misled the ASX.  Given EPS is a fundamental measure of both a company’s performance and valuation, this warrants immediate investigation.  Perhaps Gunns’ accountant forgot that more than 300 million new shares have been issued recently, and forgot to update the spreadsheet.  Or perhaps they’ve invented a new accounting standard that Jarvis is as yet unfamiliar with.

2. An analyst’s briefing issued twice on Friday (the second one correcting some sloppy mistakes), included the statement `previous 2009 EBIT guidance of $200 million unlikely to be achieved’.  That’s a serious earnings downgrade, but the media response?  Zip.  All we’ve heard over the last few days is:

‘Gunns announces $33.6 million profit’’ -  Rachel Williams, The Examiner (Rachel, by the way, was spotted sitting next to John Gay at the corporate booth at the Launceston Cycling Classic)
“Mill deal close, says Gunns’’ - Sue Neales, The Mercury
“Gunns first half profit soars 95%’’ - Business Spectator
“Paris Hilton desperate to win back ex lover Benji Madden’’ - Entertainment and Showbiz.