re: Ann: Establishment of Multicurrency Debt ... interest cover ratio covenant of 3.5:1 in the new debt,
work backwards off that, AUD425m * 7.5% = incremental annual interest bill of AUD32m.
multiply by 3.5 = $112m EBIT you need to buy with it. That is real EBIT, not 18 month forward EBIT.
425/112 = 3.8x EBIT...
The inevitable shortfall in EBIT purchased will be made up with dilution (as DPR is approaching 100%).
I have 440m shares on issue by end CY15. More needed in 2016.
CY15 EPS (thus smashed by 50% increase in register, interest expense quadrupling) = 19c.
Try flexing for interest rate increase on 60% gearing and tight covenants... it quickly gets ugly...
The rapid gearing up phase is over. Something is wrong when mgmt are using yield to support stock price instead of reinvesting the divvie in new acquisitions. DPR of ~100% plus significant dilution over nest 18 months? I'm lost.
Ann: Establishment of Multicurrency Debt Issuance, page-32
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