Bottom Shekel / Revisit the Dimris, Sup on Hat

This week Y.H. Dimri celebrates its fifth anniversary as a publicly traded company. Five years is a sufficiently long period by which to judge a company's management, certainly the last five years, which were marked by boom and bust. And the end of five years is a good time to eat one's hat and apologize.

Five years ago on May 23 I wrote a column analyzing Israel's primary market, which was coming to a boil. Every company and its guard dog too were going public. Dozens of companies were lining up to make the leap and float, though many of them were unworthy.

Y.H. Dimri was one of them.

The history of small family construction companies on the Tel Aviv Stock Exchange has been pretty miserable, as a rule. They may be floated, but fundamentally they remain privately enterprises as far as their corporate culture is concerned. Over time, the public finds that its money, invested in the company's bonds or stock, is being used mainly to pamper the controlling shareholders and their kids, cousins and in-laws.

Five years ago I didn't criticize Y.H. Dimri's books or management specifically. But I did associate it with that stereotypical family firm of the type that was hitting the floor.

Three weeks ago, in the flood of financial statements, Y.H. Dimri filed its report too. The financial press pretty much ignored it, as all eyes were fixed on the gigantic losses being divulged by the big property barons.

Dimri's chieftains made their mistakes too, chiefly investment in eastern Europe. But the bottom line is that it netted NIS 53 million last year from selling apartments in places less exotic than Miami, Manhattan, Moscow or Riga. Dimri made its money building in places such as Be'er Sheva, Ashdod, Modi'in, Netanya and Gan Yavneh.

In the five years since its flotation, Y.H. Dimri has not lost money. What it has done is to double its shareholders equity, all from operating income.

Five years ago we sneered at "the Dimris" - fly-by-night minnows that go public when the market is red-hot, and also took a swipe at the institutional investors that would buy anything. We would like to correct that. Dimris should refer to companies whose managers are focused on the business, who don't take unnecessary risks and who don't want to be larger than life.

Y.H. Dimri passed the tests of the real estate bubble and the credit crunch. The challenges it and other builders face in the real estate market remain daunting. Five years isn't long enough a test to predict how it will fare in the future. But in another five years' time, if Y.H. Dimri has remained profitable and doubled its shareholders equity again, we promise to redefine "Dimris" yet again.