"Absolutely an issue. These guys don't pay enough respect to...

"Absolutely an issue. These guys don't pay enough respect to debt levels. Their debt back in 2015, 2016 etc was just about out of control as they used external debt to pay for their acquisitions. They were saved initially by low interest rates and then by Covid which enabled them to pay a lot of their debt down.
And now, as their external debt rebuilds, with a backdrop of higher interest rates, they choose to pay $1.06 per share in dividends when the profit was $1.07 per share"

You're not wrong.

They certainly didn't give that Covid cash flow windfall any time to burn a hole in the company's pockets. It carries more debt today than it had in 2019.

It is an instructive exercise to see what has transpired between 2019 and now, in terms of what kind of growth occurred following the aggressing spending over the past two years.


While the company guides to EBITDA, the adoption of AASB16 accounting standard after 2019 makes EBITDA comparisons, between then and now, meaningless. Ditto for EBIT (albeit to a lesser extent).

So the most useful direct comparator line in the P&L is Pre-Tax Profit which, based on guidance provided today for FY2025, works out to around $740m ....derived by EBITDA of $1.725bn (mid-point of guided) less $800m of D&A (inferred), less $190m interest expense (guided).

That's about 9% higher than FY2019's PBT of $672m, which is not much of an improvement over a period of six years. In real terms, the company's PBT has gone backwards.

Worse even, today there are 7% more shares on issue than there were in 2019, meaning that Pre-Tax EPS has basically gone nowhere over that period, despite the huge financial windfall conferred by Covid, now having been fully deployed.

Objectively, not a great story.

So much so that one can't rule out a capital raising at some point.
Perhaps not a high degree of probability of happening, but not able to be ruled out.

Which is a notion that would have rightly been describe as crazy just eight or nine months ago.

.