MAp: Changing strokes

MAp Group securities fell 72 cents, or 20%, overnight. This fall has been well flagged in past reviews and relates to the shedding of entitlement to the special 80 cents per security cash payment. Today’s buyer doesn’t get that payment.

The group’s simplification scheme has been approved by security holders and the scheme is due to be implemented on 19 December—with the 80 cent payment mailed or deposited in your bank account on or around the same day.

Between now and then, the stock trades on a deferred settlement basis under the code MAPDA.

In MAp clears the runway of 15 Nov 11 (Long Term Buy – $3.50), we incorrectly stated that the stock will continue to trade under the ‘MAP’ ASX code. In fact, on 22 December the group changes name to Sydney Airport and ASX code to ‘SYD’, a logical change.

Be aware that the stock may disappear from your broker statement for a few days before reappearing under the new code. If you wish to trade the security during this period, it might pay to call your broker directly.

Airport reorganisation

Yesterday, the group announced a bold new plan to do away with ‘domestic’ and ‘international’ terminals at Sydney Airport, splitting operations by airline instead.

Qantas, Jetstar and other oneworld partners will operate out of Terminals 2 and 3 (the existing domestic facilities) with Virgin, Star Alliance partners and all remaining international carriers operating out of Terminal 1 (today’s international terminal). The plan is in its very early days and won’t be completed before 2019, but Qantas and Virgin have agreed to work towards the concept. The changes will require significant investment.

The benefits will be particularly noteworthy for transferring passengers and confused premiers, and MAp's claimed the change will increase overall capacity while reducing peak flows, and reduce airline costs. It is also likely to present new development opportunities in retail and parking for owners of Sydney Airport.

As forewarned on 15 Nov 11, we’re lowering the prices in our recommendation guide to account for the fact that MAp Group now has $1.5bn less in the bank following the special payment. The stock has risen above our adjusted Long Term Buy price of $2.70 and we're downgrading to HOLD.

To watch a video featuring Gareth updating MAp's strategy and the simplification scheme, click here.

Note: Both the Income and Growth portfolios own shares in MAp Group.