On 27 September 2018, SpeedCast International Limited’s (ASX:SDA) share prices increased by 5.852% as the company announced pricing of $175 million Incremental Term Loan add on to its existing $425 million US Term Loan B facility. The incremental Term Loan and the Existing Term Loan both will be priced at LIBOR plus 2.75% p.a., which is a 0.25% p.a. increase on the current interest margin under the Existing Term Loan and both will have same terms. The incremental debt will be used to complete the acquisition of Globecomm Systems for approximately $135 million which is expected to occur in the last quarter of FY 2018 and it will improve company’s liquidity position. This incremental term loan will help in building strong relationships with institutional lenders in the US Term Loan B market. The proceeds from the loan will be used to pay fees, transaction expenses and to repay a portion of the loans outstanding under its Revolving Credit Facility.
The total facility size of the Term Loan is $600 million which is due in FY 2025. The total facility of the revolving Credit facility is $100 million which is due in FY 2023. The company has agreed upon an interest rate swap agreement in respect of 75 percent of the Existing Term Loan to fix the interest rate payable on the term loans for the duration of five years. To proactively manage its interest rate risk, the company is planning to enter into similar arrangements after completion of the Incremental Term Loan.
In the first half of FY2018, the total revenue of the company increased by 24% compared to last year to $305 million mainly due to increase in the VSAT activations and growth in wholesale voice commencement of National Broadband Network (NBN) contract. The growth in revenues was also driven by the favorable industry dynamics. Due to delay in the market recovery, the Energy segment underperformed in the first half of FY2018 and the Energy revenues were down by 17% in 1H 2018, however the company is well positioned to benefit from strong sector tailwinds and the Energy growth is expected to increase in FY2019 and FY2020. The underlying EBITDA of the company increased by 14% to $60 million in 1H2018 due to the operating leveraged achieved through increased sales and successful execution of cost synergy benefits. The NPATA of the company is increased by 37% due increased earnings and recent acquisitions.
SDA’s share traded at $4.160 with market capitalization of $940.95 million as on 27 September 2018 (AEST 2:20 PM).
The Income available from dividends remains attractive for many investors.
We take a look at the best yields on the market and assess what they say about a company’s prospect.
One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”
ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.
Click here to get your free report.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.