Trying to ascertain profit results after an acquisition is difficult at the best of times and now, going in and coming out of COVID shutdowns in the middle of it all makes it even harder.
The 2020 financial year provided an after tax profit of $44m. With the number of issued shares at around 87m, the earnings per share fell out at around $0.50 per share.
The acquisition will cost $70m and is expected to provide an annualized EBITDA contribution of about $9m.
There will be approximately 6.5m shares issued to fund the acquisition.
The expected EBITDA contribution of $9m should result in an annualized NPAT of, say, $6m.
If the business had been purchased on 1st July, the result of all of this is that the total NPAT for 2021 may be about $50m ($44m + $6m) and with issued shares of about 94m (87m +6.5m), the earnings per share, after all of this, could move up to $0.53 per share from the pre-acquisition figure of around $0.50 per share.
The 2020 result offered a return on equity of about 16%. An extra contribution of $6m for an extra capital requirement of $70m doesn't represent 16% so we presume the "synergies" will get us there at some stage.
Yeah well, that's the plan anyway. The other guys on this thread will let you know if my arithmetic is too illusory.
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