Most of the reduction in NPATA, about 75% is due to much lower new leases being taken up with lease extensions occurring instead. The actual level of clients retained, leases retained is great with minimal losses.
The much anticipated $4m loss insurance revenue has been estimated at the lower level of $2.3m and this change will feed into H2 at that level but may increase if new leases rebound.
Management have done an excellent job in reducing permananr FTE's with an associated annual saving of $4m pre tax.
SIQ have maintained its dividend, looking after shareholders whereas MMS has cancelled its dividend and really hamstrung itseld with a $80m sharebuyback taking capital out of the business and at the same time taking a bath on its UK operations.
I would call this H1 FY'20 result for SIQ as the 'Coiled Spring Result'. When new lease start being taken out revenues will flow through the business which has already had its cost base restructured.
SIQ is in a great position balance sheet wise if any acquisition or consolidation opportunities present themselves.
Goodness knows what the market thinks but SIQ has demonstrated its client base is highly resistant to economic downturns.
SIQ a great company to invest your hard earned capital and generate a decent return come rain, hail or shine.
SIQ Price at posting:
$6.28 Sentiment: Buy Disclosure: Held
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