Currently there are 252m shares on issue. On earnings (NPAT) of $4.6m we each have rights to 1.83cents per share.
There are 96m options on issue. If they are exercised and you dont own any options yourself (which is my situation), you get diluted as the new share count will be 252m+96m= 348m shares and on earnings (FY24) of $4.6m means we now have rights to 1.32 cents per share vs 1.83 cents previously.
The 96m options have an exercise price of 10cents per share vs today at 7.5cents. So the SP will need to appreciate 33% by this time next year for anyone to even consider exercising their 10 cents options. There is a good chance they will all lapse and we wont get diluted. However if FY25 guidance is a ripper then maybe SP is pushed above 10cents and those options are exercised. Its an interesting situation where you are kinda happy if they are exercised or not..
If the options are exercised at 10cents it will add $9.6m cash to RPMs balance sheet which will be nice to reduce debt or help with the capital required to build these 6 tyre recycling plants. However from what i can tell the business wont need the $9.6m and should be able to do it out of cashflows.
RPM Price at posting:
7.6¢ Sentiment: Buy Disclosure: Held
