Let's look at the financials of $OML:
AU$128.7m
debt - AU$60.0m
cash = AU$68.7m
net debt(AU$247.2m
short-term liability + AU$802.6m
long-term liability)
- (
AU$60.0m cash + AU$119.0m short-term receivables) = AU$870.8m total liability
MARKET CAPITALISATION @$1.20 Today $718,375,048
The question is: If OML has to pay its liability down through capital raising, how heavy could the dilution on the share price be?
Debt to EBITDA ratio: 0.73
Interest coverage: earnings before interest and tax (EBIT)/ interest expense = 0.71
Note that: oOh!media grew its EBIT by 74% over the last twelve months.
Plus, Generally, an interest coverage ratio of at least two (2) is considered the minimum acceptable amount for a company that has solid, consistent revenues. Analysts prefer to see a coverage ratio of three (3) or better.
All these data come down to, whether or not could OML manage its debt levels?
Considering the foreseeable rate hike & adjusted economic growth expectations, what we might see is, that OML is paying more on its debts and earns less from its business operating.
I think the market has priced in these factors and we will see how things are by August.
(20min delay)