Ann: Half Yearly Report and Accounts, page-2

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)