Conditions to vest performance rights

2 vesting conditions (over 3 year period) :
- total shareholder return vs a group of comparable listed companies (no details regarding the list of comparable companies)
- normalised EPS growth.
The minimum required is a 5 % CAGR for EPS growth over 3 years. In that case, only 25 % of the performance rights will be vested.
To get all the performance rights to be vested, Saunders will need to get a CAGR of 15 % per year.
Reminder : adjusted EPS grew by 5.4 % in FY 24.

The managing director (M.Benson) received 564,940 performance rights after the FY 24 AGM.

SND looks quite cheap with a PE 24 of 10.6.
If the company reaches the minimum target of performance rights (EPS : + 5 % per year), it has a PE 27 of 9.2.
If it reaches the maximum (EPS : + 15 % per year), it has a PE 27 of 7.

The company also offers a decent yield with a net yield of 4 %+ based, on a pay/out between 40 % and 50 %.
Saunders has also a high free cash flow yield of 9.2 % (based on FCF 24, excluding the positive working capital effect).

Lastly, SND has a high return on capital employed : ROE of 25 % in FY 24, but ROCE much higher as the company has a high level of net cash (so capital employed of only 25 m$ vs 45 m$ of equity).

Only guidance it has given so far (at its AGM in Nov 24) : it expects revenue growth in FY 25.