Does anyone know whats the go with the CTM Treasury maxing out the current borrowing facility after end of fy18 to $183.5mil that expires in less than 12 mths? ........
' Financial facilities : The Group holds a Club Facility with HSBC Bank and the Commonwealth Bank of Australia. This multi-currency facility includes lines of credit up to $150.2 million. Security has been provided over CTM Group assets and subsidiary shareholding to a Security Trustee for the benefit of the financiers. The existing Group Facility Agreement offered CTM flexibility to activate an optional, one-off increase of facility B with both banks, up to a maximum additional contribution of$35m. CTM Treasury requested this be activated for the remainder of the facility expiring in January 2020, to support the growth of the business. The increase concluded post year end, in July 2018, for the full entitlement, increasing the facility to $183.5m.
i don't quite understand the need for this or doing things this way.... surely a growing profitable company can't be running out of cash can it, i thought these aquistions were net positive to cashflow and profits running at big margins, then i see they are increasing dividends at the same time as increasing borrowings and paying for significant parts of the aquistions with non-cash good old paper script..... the never never. I don't quite understand why some companies run the numbers like this because to my mind it adds unneccesary risks to the balance sheet, it's as if Aussie insto's and others i guess, go around squeezing boards for cash divi's to maintain insto investment and support of script so the instos can keep reporting consisstant returns for their clients and so that cash can be stripped out of the business and replaced with borrowings and dilution on the balance sheet. I dont get companies that payout divi's when dilution for growth is still needed and borrowings are increasing to also fund growth, in my opinion its not a safe LT strategy, the instos get the cash and the SH get the added risk, an example of a safer successful company strategy would be ACX if people wish to compare the two, which was a growth tech company that continued to build balance sheet strength and building up its cash balance, the instos over there use to look at and drool over ACX's cash balance and winge about no divi's and because they didn't get any divi's insto support wasn't like it was round here where the market holds CTD at high industry comaparable SP valuations, the ACX SP ' market ' valuations of ACX were much lower multiples in comparison to others in related fields, most ACX investors did do quite well for the period but the low market valuations which i believe somewhat related to lack of divi's not quality and certainty of future growth gave rise to an opportunistic predator called Oracle who manage to winkle us poor SH out of a superb company for peanuts. The insto's short-sighted lust for cash divi's over the long term is really the same as shooting themselves in the foot because it weakens and adds risks to their investments balance sheets along with restricting a boards choices or makes things harder for them and worst of all at the end of the day and in the LT it makes the instos worse off in the long run because they miss out on holding quality long-term future high yielding safe investments by basically giving them to smart cashed up predators like Oracle...... It's as if the short sighted insto spiv's are solely focussed on their high wages and bonuses instead of supporting quality long term sustainable growth companies that create fundamental wealth and jobs, these big insto's should help build a country not rape it, the culture is all wrong imv but of course i could have the wrong end of the stick here, i'm just a home retailer, If so would apprieciate any more educated person out their to correct or question any wrong thinking i may have, i'm here to learn... cheers in advance. https://www.asx.com.au/asxpdf/20180822/pdf/43xjqsxb73x1t0.pdf
Then if you look at the holders of large amounts of some of that paper script we find that real smart fella Chris Thelon who took some script and is hangin out in North America now has prudently turned them into cash at a big price because as we can see he sold off the 905,000 lot during the past fy but he's also still had a few more off SH this past year for performance i guess and is due for another 13.5 mil within 12 mths. I always like to try and understand what smart people like Chris Thelon are thinking (not that i always can, but i guess the best i can) especially when they are and have been leaders in the field they work on a global basis. Looking at his history he was holding bullish investments through his leadership at Chambers, long and strong and all that, but then he's led the Chambers CTM merger effectively turning Chambers into cash imv ... :https://us.travelctm.com/about/leadership-team/chris-thelen/ .... and then moved on to North America and more recently has been cashing out all of the 905,000 lot of holdings, so it seems to me he's not feeling as long and strong as he once was and has been proceeding to cash out those investments and is now content being a wage earner. Another view might be that he thinks he's rich enough now and is generously leaving any further gains those shares and investments to other investors........ don't be greedy, share the love kind of mentality. I also noticed another leader in the field in Australia also cashed out his SCT setup and is now working for CTD and he was getting great annual growth rates too. Any other views and opinions are more than welcome as i'm just thinking out aloud and always happy to be proven wrong or shown a more logical outlook of this situation.
Best Wishes all Fish
CTD Price at posting:
$24.92 Sentiment: Sell Disclosure: Not Held
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