I think it may look good. Here are my reasons. I just compare to...

I think it may look good. Here are my reasons. I just compare to 1H 2019.




In their latest 2020 (year) guidance they have BOO revenue at 52-54 $Mill.
They have BOO EBITDA at 34.5-36.5 $Mill.
And they have EPC at $10 mill (EPC is always a mystery and they dont say nothin' re their projects).

Most of the BOO yearly revenue has come on line early in the half year - or been on for the entire year

Tanami the entire year - so half one can have half of that 'full year' guidance
Jundee 6 MW uplift went live in July
Kirkalocka 14.5 MW was from mid September, so 1/3 of the year guidance for that we can 'count'

My point is, there is not a big build that I can see that is skewed to 2nd half. Barrow perhaps. So, let us guess the $54 mill BOO revenue will be split 45-55 or H1 of 24 mill and H2 of 30 mill. A similar EBITDA split gets you at 16 mill H1.

So, the above chart, when they line up H1 2019 and H2 2020 will see growth of

BOO Revenue 17.24 to 24 a 40% increase
BOO EBITDA 11.87 to 16 a 35% increase

Their guidance for total EBITDA is $27 mill at the top end (after costs), which if we take that as 45-55 will give 12.1 mill for 1H. That will compare to last year, 8.89.

So a bottom line percent increase of 36% for EBITDA H1 2020 of 8.89 to 12.1



Now, of course, finance costs will be up and depreciation will be up. And shares on issue are way up (50%). So I think the EPS will be ugly.

What will Mr Market say if they see % increase of 35 to 40% in Revenue and EBITDA, but say a decrease of EPS of 2.62 to just over 2? Zenith will crow about big BOO increase and that is long term to bottom line. And they will crow about more $ into the kitty to fund future growth.

I dont know what Mr Market will think? 60 cents or 70 cents?

Another point I wanted to talk about is gearing. Zenith in annual reports say they expect gearing at 50% 'as usual', but up to 70% with they are expanding. Now they calc gearing different to me. If market cap is $100 mill and debt is $100 mill and EV is therefore $200 mill, they consider that as 50% gearing.

Well, as of this minute the market cap is $100 mill and debt is about $85 mill. So they are at 85 / 185 mill = 46% gearing. That tells me they have no problem borrowing another $20-30 mill for a build if that comes to pass. Now I dont know if Mr Market like a company where 70% of its Enterprise Value is DEBT! But Zenith annual report says that is OK.

Now, mind you, it means they should have never cap raised that extra $30 mill. They did not need to. Without the 50% increase in shares the BOO and EBITDA would still be as I said above but the EPS would not be 2 and a bit, it would like 3.5 cents. Imagine if the BOO and EBITDA were up 35% ...AND... the EPS was also up 35%. You are talking about an 80 cent share.

But as I wrote many times, the cap raise steals EPS and even share price from 2020 and puts it into 2022 (as long as they build more). But, not to worry. If they build nothin in the next year, we save $2 mill in exec bonuses, and I can ask Rebeccca and Hamish for a dividend. If Zenith falls into a steady state of 6 cents EPS per year (the no build state), that means they can give us shareholders half of that. So, they can sit at 60 cents and give us 3 cents a year franked (that will be over 7%) AND still slowly pay down debt.

...and, and dont forget 2025. Zenith is actually paying down the FIIG year by year. So in 2025 that big interest payment is gone.

So, I have talked myself happy again. Builds is good (we have the money with the cap raise and 'now low' gearing). No builds is good (we get a dividend in a year or so). And in 2025 with build or no build we are all rich.

And all I type may be wrong! I wonder what Mr Market will think on 20 Feb when he reads the half yearly.