Believe the costs associated with the merger will show up this half (reported 23-Feb). It will have a negative effect on earnings, as will the loss of Franking Credits.
The trade off to this is the new investments versus the interest cost. Management always invest in boutiques on a positive cash flow basis.
All the talk from management during the merger announcements was this is a watershed year for PAC. What this means is anyones guess. I’d use Ords forecast of EPS of 70.2c for the year and 47.4c in dividends. They are always very close to the mark.
There will also be an uplift in GQG’s contribution given the increase in dividend last quarter. If VPC income begins to match the level of earnings from GQG’s increase, earnings growth should be more than 10% this year.
Watching with great expectations this year given merger didn’t occur.
Best of Luck Lost
PAC Price at posting:
$9.20 Sentiment: Buy Disclosure: Held
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