From FY22 comments: "A2B intends to distribute the net sale proceeds to shareholders via a fully franked special dividendwhen the sale is completed. Net sale proceeds will include deductions for taxes, sale costs, andany necessary debt repayments, and take account of ongoing working capital requirements."
Franking credit balance at 30/6/2022 = $27.232 M # of shares at 30/6/2022 = 121.231 M Available Franking credit per share at 30/6/2022 = 27.232 / 121.231 = 22.5 cents That supports a net dividend = 22.5 x 7 / 3 = 52.4 cents BASED ON THE FY22 COMMENTS A MAXIMUM DIVIDEND WOULD BE 52.4 CENTS.
DEBT and WORKING CAPITAL REQUIREMENTS: Prior to Covid , as at 31/12/2019 Cash = $8.4M Debt = $2.6 M, Net Cash= $5.8M As at 30/6/2022 Cash = $12.3M Debt = $18.9M, Net Debt = $6.6M To restore balance sheet to net cash of $5.8M costs 5.8 + 6.6 = $12.4M or 10.2 cents per share
Working Capital at 30/6/2019 = 72.6 + 3.4 + 4.9 - 37.9 = $ 43.0 M Revenue FY19 =$ 197.9 M ( FY19 last FY prior to Covid ) Working Capital at 30/6/2022 = 60.3 + 3.7 + 5.3 - 55.9 =$ 13.4 M Revenue FY22 = $ 126.1M My GUESS for working capital required on lower revenues = 126.1 / 197.9 x 43.0 = $ 27.4 M. To restore balance sheet to WC of $27.4M would cost = 27.4 - 13.4 = $ 14.0 M or 11.5 cents per share.
Total cost to restore balance sheet ( net cash + WC ) = 10.2 + 11.5 = 21.7 cents
Net Proceeds after tax & sale costs for property sale 69 to 76 cents per share. To restore balance sheet, suggests 47 to 54 cents available for the special dividend.
My GUESS is the special dividend will be in the range 47 cents to 52.4 cents ( before franking credits ). My GUESS for the special dividend grossed up with franking credits is 67 cents to 75 cents.
If the new CEO can run a "tighter ship" then less cash and WC is required so the special dividend is more likely to be at the higher end of the range.
A2B Price at posting:
$1.16 Sentiment: Hold Disclosure: Held
