Expectations for 2017 Results, page-6

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JoeGambler

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114

08/08/17

13:50

Post #: 26363064
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Originally posted by BrentT ↑

MNY have a history of exceeding guidance so it wouldn't surprise me if NPAT came in around $28.5-30 mil.

I do agree with JoeGambler that your dividend forecast is very optimistic. I'm expecting 2.75c for the dividend to keep the dividend flat between FY16 and FY17. They need the cash to reinvest so I don't think they can afford to raise the dividend. Particularly with the high borrowing costs.

In terms of valuation metrics, I don't think PE is a very good metric to use for MNY. Using $27.5 mil NPAT for FY17 and using NTA of ~$200 mill from the FY16 report and $218 mil from the HY report return on net tangible assets is around 13%.

At the current price, the market cap is around $233 mil which means the market is willing to pay ~1.07x NTA (using the $218mil from the HY). The market doesn't want to dilute that ROA too much. I think MNY is all about ROA and how much your paying for the loan book.

I'm looking for MNY to retain earnings to grow the loan book which will minimize borrowings, improve ROA and warrant a higher premium to NTA.

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I can understand the book value being the biggest driver of the share price given MNY is a lender. Though, at what point does the projected growth of that loan book and the increased profits from it factor into a share price? Apparently not at all.

MNY Price at posting: $1.51 Sentiment: None Disclosure: Held
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0 Great analysis

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Expectations for 2017 Results, page-6

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