EPS and dividends up 65% in 2016?
Quote:
Originally Posted by
Roger
Drivers
1. 76% of sales are exported so the recent major fall in the $Kiwi will materially boost FY16 returns and beyond
2. Cheap PE about 11 last time I looked
3. Gross dividend yield north of 10% and presently trades cum a fully imputed 5.5 cent final divvy, ex date early October)
4. Several directors recently bought in decent volume
5. Beat market expectations in FY15 a year that was already gloomy for the dairy industry
6. Expectations that the FY15 result is the bottom of the cycle for SKL ?
Disc : I'm a happy holder
To follow, an estimate of SKL's 2016 profit given best-guess exchange rates for the year ending 06/2016.
And allowing for 2016 hedge losses.
If the calculations are right, and assuming 6% inherent growth (same as this year), eps jumps by 65%, to about 19cps.
Over the last 8 years, the median year-low PE and year-high PEs are 9.6 and 16.1 - say 10-16.
Giving a valuation range of $1.90 - $3.04.
Which might help explain point 4) above.
The directors don't give much away about the outlook in the annual report - just describing it as 'promising'.
On top of that - overseas earnings rose from 72% to 76% between 2014 and 2015.
If SKL can continue to grow overseas sales its growth prospects seem 'reasonable.'
Workings and sources follow.
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15a |
16 |
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npat ul |
21.9 |
35.8 |
(5) |
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eps ul |
0.113 |
0.186 |
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po % |
79% |
79% |
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gdps |
0.125 |
0.204 |
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gy% |
9.3% |
15.3% |
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Deriv. of 16 NPAT |
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2015 NPAT |
21.9 |
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AUD +/- (1) |
1.2 |
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USD +/- (2) |
8.6 |
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EUR +/- (3) |
3.4 |
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Hedge +/- (4) |
-1.4 |
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Adj. NPAT |
33.8 |
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+ 6% grwth (5) |
35.8 |
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Effect of a change in exchange rate on 03/15 revenue, NPAT and EPS |
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06/15 figures |
06/15 figures with different ex rates (best guess for 06/16 bolded) |
NZD/USD |
0.78 |
0.75 |
0.7 |
0.68 |
0.66 |
0.64 |
0.62 |
0.6 |
US/other rev (in NZD) |
66 |
68 |
73 |
75 |
78 |
80 |
83 |
86 |
US/other rev (in USD) |
51 |
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Ch rev |
0.0 |
2.6 |
7.5 |
9.7 |
12.0 |
14.4 |
17.0 |
19.7 |
Ch NPAT |
0.0 |
1.9 |
5.4 |
7.0 |
8.6 |
10.4 |
12.2 |
14.2 |
Ch eps |
0.000 |
0.010 |
0.028 |
0.036 |
0.045 |
0.054 |
0.063 |
0.074 |
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NZD/AUD |
0.93 |
0.92 |
0.9 |
0.88 |
0.86 |
0.84 |
0.82 |
0.8 |
Au rev (in NZD) |
51 |
52 |
53 |
54 |
56 |
57 |
58 |
60 |
Au rev (in AUD) |
48 |
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Ch rev |
0.0 |
0.6 |
1.7 |
2.9 |
4.2 |
5.5 |
6.9 |
8.3 |
Ch NPAT |
0.0 |
0.4 |
1.2 |
2.1 |
3.0 |
4.0 |
5.0 |
6.0 |
Ch eps |
0.000 |
0.002 |
0.006 |
0.011 |
0.016 |
0.021 |
0.026 |
0.031 |
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NZD/EU |
0.65 |
0.64 |
0.62 |
0.6 |
0.58 |
0.56 |
0.54 |
0.52 |
EU rev (in NZD) |
39 |
40 |
41 |
42 |
44 |
45 |
47 |
49 |
EU rev (in EUR) |
25 |
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Ch rev |
0.0 |
0.6 |
1.9 |
3.3 |
4.7 |
6.3 |
8.0 |
9.8 |
Ch NPAT |
0.0 |
0.4 |
1.4 |
2.4 |
3.4 |
4.5 |
5.7 |
7.1 |
Ch eps |
0.000 |
0.002 |
0.007 |
0.012 |
0.018 |
0.023 |
0.030 |
0.037 |
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Hedge losses |
hedged @ |
Amt local $m |
Assumed rate |
Hedge val |
real val |
Gain/loss |
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AUD |
0.9319 |
4.72 |
0.86 |
5.1 |
5.5 |
0.42 |
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USD |
0.698 |
3.61 |
0.66 |
5.2 |
5.5 |
0.30 |
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EU |
0.651 |
1.38 |
0.58 |
2.1 |
2.4 |
0.26 |
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GBP |
0.4722 |
1.47 |
0.42 |
3.1 |
3.5 |
0.39 |
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1.4 |
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Sources |
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Hedge figures and 2015 results - https://www.nzx.com/files/attachments/218922.pdf p34 |
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