This company has a steady rental income of $38 Million a year from the remaining 335 child care centres on triple net leases, with a WALE of 12 years and $171 Million owed currently at 8.9% ( being 49% of their assets) and talk of this reducing to 8.5% if they reduce the debt further. Their finance costs are about $15 Million PA and running the Company now that all the fancy foreign exchange currency swaps and legal fees are out of the equation seems to be less than $6 Million ( citation needed! ) which leaves some $17 Million for the 135 Million shareholders to enjoy and being a Trust it needs to pay out its profits to the unit holders. This comes in at a lot higher than the Company is currently predicting ( albeit 8.8 cents is still a nice divie on a 85 cent share in 2012) but as I am a long term holder, I just wondered if anyone else can fault my basic maths and tell me why the dividend is not possible to rise to 12.5 cents by 2013. This is not intended as any form of ramping as my shares are definitely not for sale, just a back of an envelope observation.
FET Price at posting:
78.5¢ Sentiment: LT Buy Disclosure: Held
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