The debt thing that
@pcaruso brought up was bothering me so I went looking for further info.
From the 2015 Annual Report;
"Secured bank loan and associated facilities In February 2015 all existing loan and other facilities were consolidated into one single facility with
no contracted loan repayments over a maximum term of 5 years, interest only, with selective redraw facility. The current facility is based on a 5 year term and
will be reviewed in February 2020. The facility is with the National Australia Bank and is secured by: 1. A first registered company charge by Capital Radiology Pty Ltd over the whole of its assets and undertakings; and 2. A guarantee unlimited as to the amount by Capitol Health Limited supported by a first registered company charge by Capitol Health Limited over the whole of its assets and undertakings. Loan facilities bear interest at a variable Resultant Rate which at 30 June 2015 was 3.55% (30 June 2014: 3.55%). Loan facilities are subject to meeting certain financial ratio covenants which the Group has complied with (refer to Note 2 (iv) c)."
The "certain financial ration covenants" mentioned are;
"Since February 2015 the Group’s strategy has been to maintain a Fixed Charge Cover Ratio greater than or equal to 2.0 times and a Net leverage Ratio less than or equal to 2.5 times. This has arisen as the Group is now subject to externally imposed capital covenant requirements."
Yes, debt has increased substantially since 2014 however this was for purchases, all of which excluding one have added revenue to the bottom line already and the one that didn't cost a few thousand bucks or thereabouts. The loan facility had not been fully utilised at the time of this report ($40mill or so still available) and as per the above, it's available until 2020.
The loan covenants seem reasonable to me and a business would be smart to hold those kind of ratios anyway.
Took a lot of time and reading to find all this but it has put my mind at ease so hopefully it does for others too. This is my opinion and the info' is based on the 2015 annual report as well as other announcements to the asx but dyor.
Oh, is that green I see on my screen?
(20min delay)