I am going to rework my projected earnings figures with the changes suggested by Balance.
If the indicative interest rate bill 'before' was $10.235m based on an average debt balance of $179.834m, this implies an indicative interest rate of:
$10.235m / $179.834m = 5.7% (use in Step 2)
That means the indicative annual interest payments after debt repayment will be:
Step 1/ Calculate the incremental peak seasonal debt multiplication factor:
((340 - 100.5)/(275 -100.5)) = 1.3725 (an increment of 37.25%). Yet averaged over a financial year and using a linear model, the average increase in incremental debt is only half this:
37.25% / 2 = 18.62% => Annual debt incremental factor = 1.1862
Step 2/ Calculate Annual Debt Interest Payment
Using the liabilities in the balance sheet in post 4345:
0.057x([$149.205m+$30.806m-$10.926m]
-[ $21.606m+$31.205m-$8.226m]
-$100.5m) x 1.1862
= $1.623m
For comparison I will also look at an alternative scenario where $118m of debt is repaid:
Step 1/ Calculate the incremental peak seasonal debt multiplication factor:
((340 - 118)/(275 -118)) = 1.4140 (an increment of 41.40%). Yet averaged over a financial year and using a linear model, the average increase in incremental debt is only half this:
41.40% / 2 = 20.70% => Annual debt incremental factor = 1.2070
Step 2/ Calculate Annual Debt Interest Payment
Using the liabilities in the balance sheet in post 4345:
0.057x([$149.205m+$30.806m-$10.926m]
-[ $21.606m+$31.205m-$8.226m]
-$118m) x 1.2070
= $0.4472m
|
Rural Services ($100.5m debt repayment) |
Rural Services ($118m debt repayment) |
EBITDA |
$34.567m |
$34.567m |
less DA |
$6.918m |
$6.918m |
less I |
$1.623m |
$0.447m |
equals EBT |
$26.026m |
$27.202m |
x 0.72 equals NPAT {A} |
$18.739m |
$19.585m |
No. shares on issue {B} |
754.048m |
754.048m |
eps {A}/{B} |
2.49c |
2.60c |
There is a complicating factor that comes into my 'greater debt repayment' scenario. If extra debt is repaid then that money will no longer be available to shareholders as part of a capital repayment. Under the original scenario a capital repayment of $292m was modelled. Under the 'alternative scenario' this capital repayment drops to:
$292m - $18m = $274m