Annual Report: IFS Capital FY 08 | Investment Moats Skip to Content

Annual Report: IFS Capital FY 08

A pretty decent set of results i would say, for a predominately small medium enterprise finance company.Below are the data computed by my Dividend Stock Tracker:

  • Debt actually went down, due to repayment of finance (264mil to 200mil).
  • Both operating cashflow and investing cashflow seems to be better. Operating cashflow benefited from more repayments of factoring receivables. Still yet to determine if this is a good thing. Investing Cashflow benefited from sale of investments net of purchases.
  • They are expected to be profitable in 2009, according to their description. I see it that companies are desperate for short term financing, and factoring arrangements are a source of how they do that. The management talked about increasing interest margins, something that comes along with higher risks that IFS takes.

Can they sustain their dividends?

The company is issuing bonus shares at 1 share per 10 shares owned. No pricing is set but its either you take this bonus shares or you received the 1 ct final div payout in May.

I think its a blatant move to keep as much cash as possible. In total, i do a conservative forcast and predict that next year’s div will be 2cts like this year. That will bring yield to around 4% currently. My cost yield at 79 cts is around 2.5% now.

This is just 6% of their operating cashflow, which means that they can actually pay out more.

I would think this dividend is definately sustainable.

Are they cheap?

Similar story to the one i say about MIIF. I think at 7.6 PE and 5.9 EV/EBITDA, there are cheaper stocks out there. This is a good price to buy at. And it looks like they are holding well as well. But there are so many pennies! that are net cash right now, it makes stock liek this look expensive!

somehow, i feel this company have shown that they can weather the current storm well. Lets see their next quarter results..

Annual Report: Macquarie Infrastructure FY 08
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