The average EBITDA has been around the 20% mark but you would think that the marginal EBITDA on any new RMA's should be higher given the economies of scale.
In the RMIT prospectus, RMIT was going to outsource the management / administration to RNC and pay 55% of the commission to RNC for the privilege. Presumably this means that RNC's costs of a new RMA are less than 55% ? RMIT would get 45% of commission as a cost of capital for buying the RMA.
You wonder whether RNC might try to move to a less capital intensive model where the existing RMA's are spun off into a separate vehicle with RNC retaining management / administration rights. RNC could then pay out its debts, release cash to its shareholders ?
RNC Price at posting:
35.0¢ Sentiment: None Disclosure: Held
