In FY14 A2B had a 49% interest in ComfortDelGro ( CDC ) and a 49% interest in CityFleet Network (CFN ). The 49% interest in CDC was sold for $184M on 21 Dec 2016. The 49% interest in CFN was sold for 7.9M Pounds ( UK ) in June 2017. Proceeds were used to pay a 80 CENT FULLY FRANKED DIVIDEND to shareholders and reduce debt by over $100M .
FY14 accounts include CDC and CFN . In FY17 accounts underlying NPAT continuing operations excludes CDC and CFN . In FY14 CDC and CFN are treated as associates. My understanding there is no contribution to revenue but A2B's share of Net Profit in CDC , CFN is included in the income statement.
1. FY14 Statutory NPAT = $ 56.1 M but this includes CDC and CFN. This includes A2B's share of NPAT for CDC and CFN of $20.7 M ( appears to be non cash item not in cashflow ). There is also an impairment for CFN of $9.7 M My stab at FY14 Underlying NPAT minus CDC, CFN = 56.1 - 20.7 + 9.7 = $ 45.1 M So to compare NPAT on a like for like basis I see FY14= $ 45.4M to FY17 = $ 21.3M
Covid has affected FY20 revenue and NPAT and fleet size . The suprisingly strong operating cash flow in FY20 is due to a reduction in Working Capital ( 31.3M ) , Impairment Taxi Plates ( 15.0M) , Depreciation ( 14.1), Amortisation ( 3.7) and other minor changes in balance sheet items. ( see Note 30 in FY20 Appendix 4E for reconciliation between NPAT and operating cash flow ). FY21 operating cash flow will most likely much lower ( break even ? if H1 is a guide ) if working capital is rebuilt.
Fleet size. Other than the around 3000 taxi drivers sitting on the couch collecting JobKeeper during Covid I'm not seeing any mass exodus of taxi drivers to other occupations.
As at 31 Dec 2020 net cash = $19.2M ( cash = 21.1, debt = 1.9 )
Why do I hold A2B ? Generates strong cash flows and outside of Covid has been a reliable dividend payer and low debt.
A2B Price at posting:
$1.13 Sentiment: Hold Disclosure: Held
