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$4.81 mayne pharma group limited

Fundamentals Are Strong, page-770

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bug1

6,633 Posts.

615

19/08/17

07:37

Post #: 26604747
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Originally posted by bug1 ↑

I was thinking the opposite, given the bad news that is known so far, it should be easy to see the report in a positive light. We have seen a revenue and underlying EBITDA that only down 3% in 2nd half.
We have seen a bad statutory NPAT, down about 70% ($71m H1, $22m H2). The report will give an underlying NPAT and explain the significant items that bought it down.
We know one is the $25m writedown of Teva, which would bring underlying for H2 upto 47m, that leaves H2 still down $24m (or 33%), given that price erosion was claimed to be running at a 'high single digits' annually, and margins are around 50%, that only explains about 10% of the H2 drop (if the margin is 50% the effect of a 10% drop in prices will be doubled, but then halved because its only over 6 months)

So at the moment (by my reasoning) there is about a 23% drop in NPAT that hasn't been explained, the market is assuming the worst, because there is a lot of bad news around, but it might not be the case.

If the market is expecting a bad report, its easy to outdo expectations.

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I should have said, "price erosion was claimed (by others in the industry) to be running at a 'high single digits' annually"

MYX Price at posting: 72.5¢ Sentiment: Buy Disclosure: Held
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Last $4.81		Change 0.310(6.89%)		Mkt cap ! $409.2M

Open	High	Low	Value	Volume
$4.48	$4.83	$4.45	$993.9K	213.3K

Buyers (Bids)

No.	Vol.	Price($)
1	21957	$4.80

Sellers (Offers)

Price($)	Vol.	No.
$4.83	609	1

View Market Depth

No.	Vol.	Price($)
1	21957	4.800
1	774	4.760
1	5000	4.750
1	774	4.740
1	774	4.730

Price($)	Vol.	No.
4.830	609	1
4.840	3299	1
4.850	300	1
4.870	774	1
4.880	774	1

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