Thanks for the considered input, it can be all too rare on HC....

Thanks for the considered input, it can be all too rare on HC.

Agree strongly with most of what you've said about the buying spree etc.

Disagree strongly with your suggestions about CDD's future.

"Little risk of the business going broke" - nah, wrong. Less risk than before the CR, sure. But even with the raising complete they'll be close to breaching covenants. Forecast EBITDA is $33.7m and if they were to miss that by just $5.3m they'd be in breach. You would hope that they will find it hard to miss by that much given EOY is only 25 days away, but what of FY2017?

Saying the ROE might improve through E being written down is perhaps accurate, but...you know that would come with a loss of equity, yeah?


NPAT of $70m - ha! They were in the 70s for FY2014 on revenues of $1.3b. Revenue now is close to half that, and margins are much worse too. I don't think CDD are even forecasting NPAT figures at this point - the most you'll get from them is the EBITDA figure referenced above. If they do ever get to the 70s again, that will be many, many years away.

And finally, it will be a loooooooooooong time before anyone pays 15x for a company like this, in this space.

Finally, a question - care to expand on what benefit you get from my short paying off? I'm guessing it's that the lower the price, the cheaper you think the company is, and the cheaper you will be able to get set.