In summary, things have transpired to be about what one should have expected. The BRR video broadcast tomorrow, 19/11/2014 at 10:00am may give us information that the written material does not make patent (http://www.brrmedia.com/asx/TGA/thorn-group-limited/).
In an earlier post I opined that the EPS would be between 10c and 10.5c for 1HFY15. The 10.11c announced is at the low end of that range, but it's a passmark. I suggested that EPS for FY2015 should transpire to be 20.7c ($31M NPAT divided by 150M shares = 20.667c). Normally, I would have been inclined to stick to that FY2015 forecast, but one-off costs of the acquisition may pare EPS back to about 20c for FY2015.
I have also posted earlier that I had simply upscaled my November-2013 valuation of $2.60 by 6% to get an approximate valuation of $2.75 for November 2014, when I planned to recalibrate my valuation in the light of what the half-year announcements report. I have not done a new valuation yet, but I suspect that it should not vary much from the intuitive stab at $2.75. If the market drops below $2.50, I'll buy, and if it ramps above $3.00, I'll sell. The small parcel of shares that I earmarked for sale this calendar year to quit my last in-family debt, were sold a week ago at $2.77.
TGA is a dividend play for me, and the DPS should be 12c for FY2015 – 5c interim, and 7c final. I see the DPS increasing 1c a year for the next few years.
On debt, as TGA realises that it is a financial services company, it will tend to have the debt/equity ratio that is apt for that sector. As long as there is an appropriate spread between the cost of funds and the income TGA derives from advancing money to its subprime market, all will be well. It is interesting that TGA has seen fit to buy PDLs, and that CCP bought more PDLs in 1HFY2015 than it had presaged it would. TGA's small PDL business makes this more interesting than significant, but for CCP, an improved PDL-buying environment is significant, IMO.
