SOUTHERN CROSS PAYMENTS LTD (ASX:SP1) - Ann: Appendix 4C - quarterly, page-50 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by jlo2012 ↑

I think the vesting of some of the performance shares is pretty much a certainty. Let me know if you think I'm off with it.

It's a certainty IMO that 100m performance shares will be vested at $5m annual run rate over 6 month period.

The second 100m performance shares vesting at $7.5m annual run rate over 6 month period are very likely to be vested if this growth continues.

The third 100m at $10m annual run rate over 6 months looks out of reach but who knows, this result came in above my expectation.

The performance shares and the fact that a lot of them will be issued may be holding SP back a bit but if this growth keeps going then long term it won't matter and to be fair management probably deserve them.

They have approx $1.5m locked in already for 2H 2018. They could have a reduction next quarter (not that I think it will happen) to $1m and they would still hit the $2.5m needed for annual run rate of $5m to get first lot of performance shares.

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Hi jlo2012

Agree... I'm guessing the sp is flat because some or all of the performance shares are now a distinct possibility.

The odds of hitting targets A is logically a certainty, and B is a high probability based on this current quarter % numbers, with C being an outside chance. I'm now thinking they will probably get all the performance shares if everything falls into place.

Percentage increase in revenue needed to hit the performance shares targets, based on the 1.480m revenue from this quarter that's already locked and loaded.

A - 2.5m - Need 1.020m or a 68% revenue increase = Dilution to shares on issue if target hit - 16.79% based on 667m shares on issue & 112m performance shares available for each category.

B - 3.750m - Need 2.270m or a 153% increase - 33.58% dilution A & B

C - 5.00m - Need 3.520m or a 237% increase - 50.37% dilution A,B & C

% Formula = Increase ÷ Original Number × 100.

1,020,000 ÷ 1,480,000 x 100

2,270,000 ÷ same as above

3,520,000 ÷ same as above

The dilution will cause a hick up for a while no doubt, but with strong continued revenue numbers, the sp will soon recover.

In the longterm it will all be just a blimp on the growth curve.

Cheers
Tradealot