Ann: Half Yearly Report and Accounts, page-40

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Cheapy

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14/04/18

10:52

Post #: 32453191
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Originally posted by BrentT ↑

I think this is blatantly untrue and the options are not a drag on EPS or dividend growth.

Since 1H15 MNY has increased the automotive loan book by $25.97 mill every 6M. So with 13.159 mil options @ $1.290656 MNY will receive approx. $17.054 mil in funding from the options i.e. less than the 6M average increase in the automotive loan book. I would expect this to be used in 1H19 and result in MNY requiring less debt.

MNY earns a return on net tangible assets of just less than 13% which includes provisions + interest on debt so lets just assume 13% as there is not debt associated with the options funding. This gives around $2.217 mil NPAT from the options funding.

With 160,442,198 shares on issue + 13,158,710 options the options funding will provide EPS of 1.277 c / share. EPS for FY17 was 18.81 c/ share so the, diluted, return from the options funding is around 6.8% on FY17.

Due to the recent debt arrangements, dividends increased 80% on pcp in 1H18 and I expect that this level will be maintained. We've gone from 5.75 c/share to 9 c/share. This was unexpected to me and I'm happily surprised.

So EPS is increasing at double digit rates, and will continue to despite dilution and we've just seen an 80% increase in dividends which will easily be maintained. I can't see that there is any drag on EPS of DPS from the options.

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Morningstar estimates have single-digit growth forecast for 2018, 2019 and 2020 for MNY. As a shareholder, I would much prefer your estimates come to pass

MNY Price at posting: $1.84 Sentiment: None Disclosure: Held
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Ann: Half Yearly Report and Accounts, page-40

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