Re: YoY sales being down. While this is true, this is all within managements stated guidance. Do you have any reason to mistrust their full year guidance?
Re: EPS accretion of 7.7 c assumed if owned for full year. This is true, you need to account for this when estimating FY18 EPS from the figures provided. When I do this I estate FY18 EPS of around 7 c. This is still double digit growth from FY17.
The benefit of stating the earnings impact this ways is it allows us to calculate the earnings we are paying for across a full year. This then allows us to adequately assess the merits of the acquisitions and the capital raising. Which is the point of the announcement. We are paying about $81mil for about $10mil in NPAT (PE of approx. 8x) compare this to PGCs PE of 12x and the price seems reasonable.
Re: $6m for vendor issuance. Do you expect the joint lead managers to provide their services for free? Would I prefer that we had this cash, absolutely. But it's a reality of carrying out a capital raising. $6mil is about 7.5% of the value of the capital raising. Would need to compare to previous capital raising to assess if this is reasonable.
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