Probably the easiest way (rather than reducing divs and paying down debt) would be to have a CR. This would also probably increase liquidity which has other benefits.
For example, to reduce gross debt by half right now you could issue 30m shares at $2. The theoretical new SP would be about $2.23 assuming a current sp of $2.27. The NPAT would rise slightly due to reduced interest payments (to about $26.5m from $24.5m) and the eps would drop to about 14c/share from 15.4c.
This is not a particularly scary prospect for me and I would still be a holder at those levels. And as the SP rises over time the maths improves as you can issue fewer shares at a higher price.
eg at a current SP of $2.75 you'd only have to issue 24m shares at $2.50 to get the same outcome and divs could be held at 14.5c/share.
And none of that includes any organic growth, which according to the latest update was 10% p.a.. So in one year you're back to the current 15.4c/share or higher.
6186.
DDR Price at posting:
$2.27 Sentiment: Buy Disclosure: Held
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