IMF exceeds expectations


IMF (Australia) Limited (ASX: IMF) reported on 22 August 2012 preliminary full year results with net profits coming in at $42m.  Dividends for the full year were declared at 10 cents per share fully franked.

In our previous articles, we set expectations for IMF to achieve an average net profit per year of at least $24m.  This has been easily met, but dividends of 10 cents fell short of our expected 15 cents per share. We also estimated that after the Centro payback, IMF’s cash would exceed $100m.  The balance sheet shows $130m in current assets, before payment of dividend.

As at 30 June 2012, IMF had a case investment portfolio of $1.2b.   This does not include the Wyvenhoe Case and the major portion of the Banks Fees Case.  Other important figures include the amount invested in cases being $66m. and book value increasing to $111m.

Foolish takeaway

The current market capitalisation of IMF at $1.65 is $200m.  The current assets less convertible notes liability is $95m, which accounts for nearly half the market capitalisation.  The implication is that the current case portfolio is worth only $105m.  IMF has already spent $66m, and based on its past track record, we expect this to generate at least $200m ($3 for every $1 spent) over the next 3 years.

In summary, IMF’s financial performance has easily exceeded our expectations, and the balance sheet has improved.

If you’re in the market for some high yielding ASX shares, look no further than our Secure Your Future with 3 Rock-Solid Dividend Stocks report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool contributor Peter Phan owns shares in IMF. The Motley Fool‘s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.