If you look at the cash flow for H1 the borrowings went up $2.8m, that covered the shortfall in distributions vs cash from operating activities plus the capex investment.
This increased the gearing, on the back of modest devaluations, from just over 35% to just under 37%.
Another half year like that & they'll be around 39% vs target range 30-40%.
Which suggests that a cap raise or asset sale may be necessary.
That's what IMO is weighing on the unit price.
To bring the cashflow inline with distributions & capex the distributions would need to be cut approx 20% (rent increases & all other things being equal.
That would still be a yield of approx 9.8%
NTA is 94c vs 69.5c is a 26% discount which with the state of their Balance Sheet is a little light to me.
To get gearing down 3% they'd have to raise approx $27.5m, at 60c (14% discount) raise price that's an approx 15% dilution.
If you add together the 15% dilution & the 20% distribution cut to stop the gearing increases that's a 35% distribution reduction which still gives you a 0.0525c distribution or 7.95% on 69.5c.
Although of course the unit price would likely drop to 60c.
So although with the cap rates they are using, devaluations going forward should be minimal I think the risk of a cap raising or asset sale with the likely impact on distributions is too high a risk.
COF with lower gearing all be it lower cap rates is IMO a safer bet.
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Last
67.0¢ |
Change
-0.005(0.74%) |
Mkt cap ! $212.0M |
Open | High | Low | Value | Volume |
67.0¢ | 67.0¢ | 67.0¢ | $567 | 847 |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
6 | 59481 | 67.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
67.5¢ | 30329 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
6 | 59481 | 0.670 |
3 | 51533 | 0.665 |
2 | 4458 | 0.660 |
1 | 693 | 0.650 |
1 | 4652 | 0.645 |
Price($) | Vol. | No. |
---|---|---|
0.675 | 30329 | 1 |
0.680 | 810 | 1 |
0.685 | 843 | 1 |
0.690 | 3000 | 1 |
0.695 | 15656 | 2 |
Last trade - 10.10am 03/07/2024 (20 minute delay) ? |
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TRITON MINERALS LTD
Adrian Costello, Executive Director
Adrian Costello
Executive Director
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