Based on the FY22 figures the Prescribed Capital Amount was $855.5million. The target PCA multiple range is 1.4 to 1.6x. So taking the upper end of that . 1.6 x 855.5million = $1368.8million. FY22 HLI had $1888.4milion of regulatory capital under AASB17 standards. ie. at FY22 (under AASB17 rules) HLI had $519.6million of capital to return to reach the top end of target range. To put that in context the balance sheet at FY22 showed $1205.7million of net assets under AASB17 . ie. HLI has to return 43% of it's net assets to reach top end of target PCA multiple range.
Me Guessing that PCA multiple is now nearer 2.4x PCA would imply something in the range $684.4million to $855million needs to be returned . or 57% to 71% of balance sheet net assets to reach 1.4 to 1.6x PCA.
The company has not changed it's guidance of reaching target PCA multiple next year. The question remains: how is the company going to return this much capital in an ever shortening window of time. I guess at the end of the day they can just do a massive special dividend or capital return .
HLI Price at posting:
$3.70 Sentiment: Buy Disclosure: Held
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