Ann: Acquisition of Projects Assured and Trading Update for FY18, page-2

mmm DWS continue to scramble to shore up earnings which continue to slide, now unashamedly doing so in the same announcement!

I calculate this downgrade to be a 25% fall in underlying earnings, with Und EPS of about 10 cents for FY18. But guess what, the announced acquisition will add 3.5 cents to FY19 EPS and take earnings back to where they were in FY17! What neat symmetry by management.

The fact is that EPS even after this acquisition (if it performs as hoped) will still be below levels of FY10 and FY12 despite major acquisitions of Symplicit and Phoenix and the leveraging of the company.

I lightened up after the 1H18 report where the earn out write back masked further deterioration in the business. But it seems even more lightening will be needed now.