I've finally sat down and populated the spreadsheet and digested...

I've finally sat down and populated the spreadsheet and digested the figures for FY16 and I've come away a happier shareholder.

NIBD: Nil.
Improving cash flow.
Record EBIDTA.

Getting back to Brazil;

Samantha Cheetham
"The improvement in the European and Brazilian operations, along with the weakening Australian​

dollar, were key drivers over the year.

Brazilian sales increased by 14.1 per cent in local currency, highlighting strong growth in non-Amalgam products. SDI Brazil commenced packing some products in May 2016, and will continue to expand this process with the view of packing all products for the South American market. The devaluation of the Brazilian Real (BRL) has continued to have adverse effects on the subsidiary’s results".


The JH16 Brazilian profit wasn't lost on me and neither was the JH15 profit. I would like to think that the blow out in DH15 can be put down to the expense incurred with new the packaging/processing plant.
Any thoughts on why there would be such a seasonal variation?

I think we can safely assume that the plant had minimal (if any) impact on the JH16 figure given it wasn't operating at any level until May. (It may in fact have continued to have a negative impact if costs of set up were still being incurred early in the half).

Given also that the exchange rate against the Brazilian Real was at an historical high during FY16 the result can be seen as quite a turn around. Despite what the headline figure indicates.

The DH15 Brazil Pre Tax Profit ($m)  -0.96.  For a company with an annual Pre Tax Profit of approx. $11m it would be a lovely slice of change if this figure could be turned around. Remember the loss was made against a back drop of a 'Real' in free fall and plant setup costs. Now we have sales increases in Brazil, an operational packaging facility and the growth is in non-amalgam products. (Higher margin products) and the CEO predicting a flat profile for amalgam sales.

One of the first figures I'll be looking at from the DH16 report will be the Brazilian result.

Samantha if you read this; It would be nice to have more transparency around the Brazilian operation. Plant setup and operation costs vs benefits. Long term capacity and vision.

And yes I've also a added a couple more to my holding.

From the market briefing;

In closing what is the outlook for the FY2017?
Samantha Cheetham
"We expect our mix of sales to continue to shift in favour of non‐amalgam products with these sales
expected grow by 10 per cent this year Our amalgam sales are expected to be flat. Finally, the​

dividend payout ratio is expected to be at a minimum of 30 per cent of after tax profits".


(Higher margin non-amalgam sales up 10%.  Amalgam sales flat, remember they have been falling each year, and thought it worthwhile to reiterate the div payout ratio. Are they considering lifting it?)

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