Although they give loans, the loans do get repaid.
In FY13 and FY14, there was actually net re-payment of loans, as the BD loan balance reduced, and FID had the benefit of improving investment CF's as a result.
However, yes, in FY15 it does look as though this balance will increase.
There is an argument that the loans represent growth capex ( ie funding to franchisees/associate planners that sit outside of the FID group to increase their business by way of acquisition or whatever), in order for FID to increase their FUA
However, over time, as the loans are repaid, the net impact on CF's should be nil, so on that basis probably fair to exclude from FCF.
Equally, if you took the other view when valuing FID, you could assume that FID continues to make loans that would never be repaid....in which case that would obviously lower the FCFs
FID Price at posting:
$1.83 Sentiment: Hold Disclosure: Held
