Further to my last post on the Free Cash Flow increase. I have attempted to normalise it as follows. From the $219M increase:
* Take off $30M (M5 deferred dividend not repeating in 2nd half);
* Take off $174M (NCX capital release - non operational);
* Add $39M (due to interest payment timing).
This results in my estimate of normalised FCF increase of $54M, or an 11.7% increase. This was enough to result in the distribution increase for FY17 of 13.2%, which may be a better guide as to what TCL expects for FCF for the full year.
I fully accept that this is probably not 100% accurate, so at this stage I will only increase my FCF estimate for FY17 to $1037M for a P / FCF per share of 21.1 at the current, increased share price of $10.72. Still very good value IMO.
TCL Price at posting:
$10.73 Sentiment: Buy Disclosure: Held
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