Comparing MNY to SIV. Have been through the SIV report and on a fully diluted basis with NPAT guidance of $25M (top end) EPS is 71 cents, equating to current year FY 17 PE of 15. I have analysed SIV before and it has traded on current year PE’s of 12 > 18 through the years.
As the anticipated larger loan facility is secured, dividends increase to 30 > 50% payout ratio and SACC makes up a smaller and smaller % of the overall revenue the business over time will graduate to a PE of 15
Admission to ASX 300 as well at some stage. On the fully diluted figures of NPAT of $27M ( they always
sandbag) on 175M shares that’s EPS of 15.5 cents. Now market will reward them with PE expansion to
say 13.5 i.e. $2.10 on achieving this milestone. Projecting FY 18 guidance at $32M (my estimate @ 20% growth) with PE expansion to 15 equates to $2.75 per share. FY 18 guidance will be in 12 months and at this point the market may reward MNY with a PE multiple of 15. May enter the ASX 300.
TSR over the next 12 months could be over 70% with FY 18 guidance of $32M given at next August. 40% payout of dividends is 7.5 cps (diluted) on $32M 10.65 cps including franking credits .TSR increases to 76%. PE of 15 is the top end I admit but if they can demonstrate to the market they are more like a SIV / secured lending finance company and the “pay day” lending stigma fades they have a good chance of achieving this. PE range is 13.5 > 15 equating to $2.50 > $2.75 price target.
Still plenty in the tank with this one in my opinion.
MNY Price at posting:
$1.61 Sentiment: Buy Disclosure: Held
