Originally Posted by
Lizard
Only just getting the chance to read through your analysis - possibly someone else has commented, as yet to finish reading. My calc for the EBIT ratio would be 1.08. However, we knew they would not be running at top return in first half as they still had a considerable quantity of debentures that they were having to allow for possible repayment on close to end of period - that meant holding lots of cash while also paying interest to the debenture holders. Once the last of the guarantee debentures had expired, they would either not have the interest payments to make on them OR they would have been renewed and HNZ could then reduce the amount of cash on hand through lending once they no longer needed to allow for a bulge of maturing deposits.
As expected, the third quarter is said to have lower funding costs and it could be expected that this would be maintainable. Therefore, we could probably comfortably multiply the 3rd quarter NPAT of $5.3m by 4x, divide by 0.7 to allow for tax and add to funding costs (doubling first half funding costs of $62m). That would give an EBIT ratio of 1.24 by my calc - and given the funding costs have likely reduced somewhat, conceivably higher.