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Payce – 1H14 results in line with expectations

by Justin McCarthy | Feb 25, 2014

Key points:

  1. 1H14 NPAT of $5.1m was in line with expectations ($16.0m in 1H13)
  2. Total assets up 60% from $217.5m at 30 June 2013 to $349.0m at 31 December 2013, with total debt increasing from $62.4m to $183.9m over the same period, mainly as a result of the $50m bond issue and further draw-downs on construction finance
  3. FIIG understands the East Village project is progressing to plan with no change to expectations that it will be completed in August 2014

Last week, Payce Consolidated Limited (Payce) reported their 1H14 results with a NPAT of $5.1m ($16.0m 1H13) in line with expectations.

FIIG also understands that the East Village project is progressing to plan with no change to expectations that it will be completed in August 2014.

As a property development company, revenue and profit figures are volatile and highly dependent on when developments are completed and sold. As expected, revenue and profitability were low in 1H14 and that is expected to be continued into 2H14. However, upon completion of East Village (and other projects) in FY15, the revenue and profit figures are expected to increase substantially.

The following table is taken from the Payce research report dated 20 November 2013 released at the time of the $50m bond issue. The column in blue (1H14 to 31 December 2013) has been added for comparison purposes. (Note that the forecast figures for 2014 – 2017 have not been updated and remain those provided by Wellington Capital, Payce’s corporate adviser, at the time of the bond issue).

Whilst half year forecasts were not provided, the 1H14 figures are in line with expectation and on track to meet FY14 expectations.

As at 31 December 2013 Payce had cash and cash equivalents on hand of $47.8m, up from $24.9m at 30 June 2013.

Source: Company Accounts and Wellington Capital analyst forecasts (as at November 2013)

The Payce 9.5% fixed rate bond with a maturity date of 3 December 2018 is currently trading at an indicative clean price of $102.25 which equates to a high yield to maturity of 8.91% and running yield of 9.29%. 

Please speak to your FIIG representative if you are interested in the Payce fixed rate bonds.

All prices and yields are a guide only and subject to market availability. FIIG does not make a market in these securities. Payce bonds are only available to wholesale investors.