So it’s really important they deliver the touted 20% increase in eps (proforma) in FY19 plus the 10% from the latest announced acquisition ..or else the market might pack another sad
Correct.
It would be savage.!
And with even more shares on issue, it gets harder to achieve.
Look good value to me. Still under the radar so cap raisings may've tipped the supply side in the short-term. Great track record of creating value and increasing EPS though. In the long-term continued earnings growth should further increase mcap, stimulating demand as they come onto the radar of more institutions.
Anyone else had a chance to read through the latest results? I've had a read through but need to dive a little deeper on a few points.
Not sure if I like the dilution of shares on issue with the $64m capital raising, part payment of acquisitions in shares. This heavy dilution is going to make it challenging for real eps growth. Debt at elevated levels too - though not surprising given their shopping spree they've just been on. Prices they paid for the acquisitions seemed to range from reasonable fair price to a little too much.
Next year will be the make or break I believe - whether these $3m/p.a. cost savings will come to fruition, and whether synergies can be realised from these acquisitions. Proper consolidation and integration of the acquistions into their business model should be pretty smooth.
I do like the strategy of expansion and leveraging off their core capital (one off) intensive products to focus more on complementary single use consumables. Time will tell again on how successfully they execute the strategy. I'm optimistic but it's probably more a wait and see for half year results
What's with the Hong Kong purchase at above market price A$0.91?? I get it helps fund more acquisitions but what other strategic benefits is this providing?
Still chewing through all the minor details myself. I'm intrigued by the 0.91 issuance to Chinese Pioneer. When delving into the conditions the $1 takeover clause certainly piques one's interest as to what might be going on behind the scenes - potentially suggests they might've had some inquiries and be looking for a defensive 'block'. Chinese Pioneer don't have the look of a company throwing money around without careful deliberation.
I feel 75c is a pretty good entry level, wouldn't be surprised to see $1+ in the next 12mths contingent on successful integration of the recent acquisitions, and def mirror some of your points Vici on cost savings etc. This issuance overhang is a short to medium term concern, and set to keep a lid on things.
The above is of course just my opinion and not investment advice.
Disc: Holding, might consider a few more if it drifts a cent or two lower
Still holding but have not been impressed with the SP over the year. At least they offer DRP as they require an AUS bank account to pay divies these days.
ps.I no longer bother to hold Aussie stocks that do not have DRP,and only pay dividends into a bank a/c..The time and energy getting them to pay into my NZ a/c is not worth it,together with the fees my bank charges me.
NZ companies paying fully imputed divies are more attractive to me nowdays.
Originally Posted by winner69
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