my analysis...for what its worth...9 Jun 2014 13:21
- earnings and EPS up albeit slightly.
- divs up 10% as promised.
- return on equity 47%. for the last 5 years return on equity has been over 50%.
- kcom are paying out over 60% of their earnings on dividends.
- slight increase in total assets but also slight increase in liabilities, so total shareholder equity has increased slightly to £85m *HOWEVER* goodwill is down as £85m also so actual shareholder equity if you discount goodwill (which i always do) is zero.
- for free cash flow i calculate :
Operating CF 73.176
plus interest received 0
minus interest paid -4.436
minus tax paid -1.531
minus fixed asset purchases -16.207
plus fixed asset sales 0.633
=£51.635m
so free cash flow good. actually FCF/share is higher than EPS this year but over the last 5 years FCF/share is on par with EPS.
overall i am happy with these results, the expectations were that profit was going to decrease slightly so nice to see a small increase. like most people tho im here for the divs but i dont think thats a bad thing, after all some stocks are purely for divs, like national grid for example, and i suppose kcom too.
i am slightly nervous about the shareholder-equity-less-goodwill situation though, so to be honest i would not mind if they cut divs a bit after 2016 and put some money back into the business, see that shareholder equity figure rise.