@craft Agree, a case of be alert not alarmed. You seem to be on...

@craft

Agree, a case of be alert not alarmed. You seem to be on the same page with me on being weary of any communication drift whenever management of any company changes.

@madamswer

Thanks for the replies.

I realise this is probably minutia in the grand scheme of things. But it’s an interesting discussion.

It looks like John Grant's termination benefit, if I'm reading the remuneration report correctly was in the vicinity of $550k. Which is a little over a third of the $1.5m reported. Excluding this amount I think for 2016FY it’s about the same as the 2012FY with reference to the historical details you kindly provided.

You could also be correct; the acquisition / change of control may have resulted in some restructuring of staff.

I actually find it fairly hard to get a handle on these expenses for DTL.

There’s two issues:

1. DTL grew particularly fast from say 2004 to 2011. So this part of their history wasn’t particularly a good gauge as it wouldn’t appear they were taking an axe to their staff numbers.
2. The period 2012-2016 is also interesting because they have had a culture of carrying staff costs in excess of what the market conditions of the time required in the hope that the market conditions would pick-up and they would be in a prime position to take advantage as they already had the staff. So they weren’t cutting staff unless absolutely necessary.

It’s probably safe to say they will keep the same philosophy as mentioned in 2) for the foreseeable future.

But very important to watch for any changes I would have thought as they could have more impact on the company’s valuation than just termination benefits.

Who knows what the management presiding over the company during the next lull in IT spending will do (let alone when that will be).

In my own valuations I generally err on the side of caution. So I’d model termination payments towards the higher end rather than the lower end (would probably exclude John Grant’s payment though).