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08-03-2014, 07:54 PM
(This post was last modified: 08-03-2014, 07:57 PM by AlphaQuant.)
(08-03-2014, 07:37 PM)CY09 Wrote: Just curious SS produces about +45M in OCF. Lets assume it produces the same amount next year and spends 40M (30M for the extra space acquisition and 10M for other PPE). Wont it comfortably be able to draw down 35M from its 100M cash pile to continue its current dividend?
that's the tough part abt all these guestimations since there are so many moving parts, including the assumption of the relationship between GFA and earnings.
In the situation I painted above, the OCF is sufficient.
However, that is a situation where the GFA expansion is funded thru 25% acquisition and 75% leases, so if you go to a 50//50 and above, the math works out differently.
In the latest earnings report, they stated "There were not many new supermarket outlets serving the mass market opened by the competitors in 2013 and the focus of industry could be improving same store sales in 2014", as well "The Group did not find suitable retail space to open outlets in FY2013", so i think it's up to your imagination to figure out what your most-likely scenario will be, churn the pricing and find your valuation.