SXL Time to Accumulate, page-4

quick summary:
firstly need to always back out these stupid AASB16 accounting for leases, this standard just completely muddles the true view of the p&l and balance sheet.

Net debt increase was nearly totally accounted for by the acquisition of Redwave Media regional radio stations from SWM. On 8xEBITDA purchase price, profit just needs to be above cost of debt (around 4.5% interest rate from memory) for this acquisition to be EPS accretive in the future.

Cut in dividend is good to maintain cashflow during this period. No funny distortion by paying out more dividends than earnings.

Restructuring cost benefits will start to show through in 2nd half FY2020 and carry through into FY2021. (I believe there will be an additional round of restructuring costs into 2H2020 based on what I am hearing on the street)

Overall tightening of cost structure will lower the cost of doing business. As the advertising market recovers in FY2021, return of revenue will flow faster to the bottom line.