Ok, looks like people are still arguing over the same things here. The thing that pushed me out of this share (I bought it for the dividend yield) are similar to the concerns raised by Mal (who initially I thought was eccentric and a but crazy TBH with his criticism), but it appears there are many on here that have no idea how to review an Income statement and appear to just hold out for statements made by JW.
Anyway, I thought it would be good to post proforma Income Statements that I've calculated based on data in their Interim financials (Feb) and their Annual statements (Sep or Aug whenever they were released). These are cold hard facts, they are only based on the FY22 period and not the prior 6 months as the same level of data was not included in their interims a year ago so I can't calculate it, but the 6 month rolling would show a slightly reduced movement by tonne as the C1 cash cost in H1 2022 was $90.52 vs H2 at $86.92 for an average of $88.80 for the year.
The blue is a restatement of the FY22 Income statement should the acquisition have been in place for the whole year. As you can the saving ex[ected at a C1 cash cost level would have been just under $15 ($71.58 vs $86.33) with this all being haulage obviously. Ultimately though we would expect EPS to move from 9.8c / share to 10.2c (assuming only the 1st 30m tranche 1 shares are issued), once you move to the others, full consideration would decrease EPS to 9.2c and if you go with the probability of release as shown in the interims (Note 22) then EPS would still decline from 9.8c to 9.6c, which is why several of us here have been saying that the acquisition was all smoke and mirrors. Ie. JW says we are saving operational costs, but our EPS is declining so actual shareholder value has reduced.
H1 performance was weaker. Saving from haulage on a full year base was expected to be around $15 as shown, they have achieved $10.51 so a decline on what was expected, and probably why the $10 / tonne saving has been ignored. It will be interesting to see if FY this pushes higher with anticipated higher volumes in H2 (in theory it should).
If you exclude the impact of the acquisition, the profit for the half would have been just $3.4m, if we normalise the results for the "gain on acquisition" (which I still don't think will clear the audited financial statements) then they would have made $3.5m or again an erosion of shareholder value on an EPS basis post acquisition.
I will continue to follow news for the company but the change in profitability for me (as I bought for Income) was too risky and whilst I see upside in H2 from H1, will it be enough to generate a solid dividend? I'm not sure.
Whilst I show shares below at 546.2m post acquisition, they issues another 37.5m performance shares in October, so that increase SOI to 583.7m. To pay out a 5.25c dividend at 80% (the top rate), they would need to generate between $27m and $35m in H2 (depending on if they include the "gain on acquisition" into their calc). I think thats a stretch personally, even with recovering IO prices.
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