The EPS issue is not really bad news. It is just a quirk of the numbers. Though perhaps management should have explained it better.
The weighted number of shares issued in the 2016 EPS calculation was 135M even though there were 159M issued at the end of the year. The weighting difference is driven by the timing of the large acquisition driven placements, which in 2016 were in October, half way through the reporting period.
At the end of the half just completed, the weighted shares on issue jumped from 135M to 163M, a large jump despite the fact that only 4M new shares were issued during the half.
So the fall in EPS isn't an issue as afar as I am concerned. Though it does mean the EPS last year was artificially inflated, and we have just played catch up to a more real number.
If anything, cash flow is proving to be very lumpy, cash at bank has dropped materially, and they have not paid down any debt, but if the coming second half is as strong as the second half last year, it should be a belter....
Gosouth
PGC Price at posting:
77.5¢ Sentiment: None Disclosure: Held
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