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ARM: A Time To Board?
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Aguytrying
#31 Posted : Tuesday, July 26, 2016 8:53:52 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Was thinking about this share today. How will the cash injection affect p/l going forward. Ie how much will it reduce interest payment and finance costs. Effect of new shares to pe, NAV.
Anyone with interest please crunch these numbers for us.
The investor's chief problem - and even his worst enemy - is likely to be himself
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Aguytrying
#32 Posted : Wednesday, August 17, 2016 3:52:04 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Aguytrying wrote:
Was thinking about this share today. How will the cash injection affect p/l going forward. Ie how much will it reduce interest payment and finance costs. Effect of new shares to pe, NAV.
Anyone with interest please crunch these numbers for us.


CDC new shares - 353,665,200
ESOP- 21,000,000
Existing shares - 495,275,000

Total number of shares now- 869,640,200

PAT in last good year - 1,493,393,000 ( this is what it should get back to when "normal" profitabilty resumes)

EPS - 1.72

PE at (30 )- 17

dilution 43%

Factor in the fact that CDC got in at 40.00. But also remember their gross dividend is high, and maybe benefiting in other ways a minority wouldn't.

Also remember the high PE afforded to safaricom in the same market.

I don't know where its a good price to buy

The investor's chief problem - and even his worst enemy - is likely to be himself
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Fyatu
#33 Posted : Wednesday, August 17, 2016 4:02:57 PM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
The CDC cash will boost the cash situation on the balance sheet and based on BV, i think it is a good buy at 27 bob
Dumb money becomes dumb only when it listens to smart money
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VituVingiSana
#34 Posted : Wednesday, August 17, 2016 11:53:36 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Fyatu wrote:
The CDC cash will boost the cash situation on the balance sheet and based on BV, i think it is a good buy at 27 bob

Most of the CDC cash will go to pay down debt rather than "holding cash" but that will have a positive knock-on effect of major savings on interest costs.
Some of the cash will be used to finance Working Capital which should help increase sales.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Fyatu
#35 Posted : Thursday, August 18, 2016 10:26:34 AM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
VituVingiSana wrote:
Fyatu wrote:
The CDC cash will boost the cash situation on the balance sheet and based on BV, i think it is a good buy at 27 bob

Most of the CDC cash will go to pay down debt rather than "holding cash" but that will have a positive knock-on effect of major savings on interest costs.
Some of the cash will be used to finance Working Capital which should help increase sales.


Indeed, the cash will pay of the debt and will increase total equity to a little bit over 30 billions shillings, consequently making the book value to be 35 bob (30b divide by 800 millions). I still old that anything between 25-27 is a very very good entry point for this gem.
Dumb money becomes dumb only when it listens to smart money
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Ericsson
#36 Posted : Thursday, August 18, 2016 11:25:54 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,808
Location: NAIROBI
The debt will be paid down and the company will take in new debt to consolidate the expansion done so far.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#37 Posted : Thursday, August 18, 2016 11:34:11 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Ericsson wrote:
The debt will be paid down and the company will take in new debt to consolidate the expansion done so far.

What do you mean "consolidate the expansion"?
CDC might be a good source for new debt. Perhaps at better pricing than the current set of banks or CP.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Aguytrying
#38 Posted : Thursday, August 18, 2016 1:56:40 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Fyatu wrote:
VituVingiSana wrote:
Fyatu wrote:
The CDC cash will boost the cash situation on the balance sheet and based on BV, i think it is a good buy at 27 bob

Most of the CDC cash will go to pay down debt rather than "holding cash" but that will have a positive knock-on effect of major savings on interest costs.
Some of the cash will be used to finance Working Capital which should help increase sales.


Indeed, the cash will pay of the debt and will increase total equity to a little bit over 30 billions shillings, consequently making the book value to be 35 bob (30b divide by 800 millions). I still old that anything between 25-27 is a very very good entry point for this gem.


What's the NET asset value of ARM?
The investor's chief problem - and even his worst enemy - is likely to be himself
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Aguytrying
#39 Posted : Thursday, August 18, 2016 1:58:43 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
VituVingiSana wrote:
Ericsson wrote:
The debt will be paid down and the company will take in new debt to consolidate the expansion done so far.

What do you mean "consolidate the expansion"?
CDC might be a good source for new debt. Perhaps at better pricing than the current set of banks or CP.


If after these losses the company continues to be debt hungry, I will not invest. They should have learned to reduce debt and a better equity to debt ratio
The investor's chief problem - and even his worst enemy - is likely to be himself
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VituVingiSana
#40 Posted : Thursday, August 18, 2016 9:54:42 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Aguytrying wrote:
VituVingiSana wrote:
Ericsson wrote:
The debt will be paid down and the company will take in new debt to consolidate the expansion done so far.

What do you mean "consolidate the expansion"?
CDC might be a good source for new debt. Perhaps at better pricing than the current set of banks or CP.


If after these losses the company continues to be debt hungry, I will not invest. They should have learned to reduce debt and a better equity to debt ratio

I doubt CDC will allow Pradeep to go crazy with the debt. CDC must have negotiated veto powers.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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