Another ASW result that is as boringly predictable as it is impeccably clean.
It also happens to be a record result, despite nothing all that dramatic happening in the market in which ASW operates.
If the growth continues at this sort of modest, 10%pa pace, then on FY2018 valuation multiples the stock will be trading on an un-demanding 8.5x EV/EBITDA and 15.0x P/E.
Because the company pays all its earnings out as dividends, the stock yields in excess of 6.0%. Since 2008, DPS have grown at a CAGR of 10% pa, despite the starting base period coinciding with a point of time during the commodity boom.
The one little niggle that I had was the shocking drop off in Cash Flow Conversion [*], to 99%, compared to its long-term average of 102%.
CASH FLOW CONVERSION (%)
DH2009: 99
JH2010: 89
DH2010: 102
JH2011: 106
DH2011: 99
JH2012: 107
DH2012: 102
H2013: 107
DH2013: 101
JH2014: 100
DH2014: 103
JH2015: 108
DH2015: 100
JH2016: 100
DH2016: 99 (!!)
I have drafted my letter of concern, to be mailed to the CEO, about this under-performance.
[*] Defined as (Net Receipts plus Movements in Working Capital) divided by EBITDA)
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Dani Nadri, Country Manager Australia
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