No. of Recommendations: 5
londonstockexchange.com - Interim results for six months ended juneI mentioned before, with Unite's buybacks, if they can keep them going as they did in H1, the effective gain per year is almost as valuable as the core business.
Here's another smaller example.
In the original Empiric bid, Unite expected to make synergy savings of £13.7m/year.
In the results today, they upgraded that to £18m/year. ("Hello Student cost synergies increased to £18 million p.a. from FY2027")
£14m, £18m, I guess it's not exactly exciting numbers if you're used to investing in US companies.
Let's take that £4.3m/year of new value and ask, what's it worth at a P/E of 15x? There's no corporation tax, so it falls through to the bottom line.
It's 0.8 pence per share per year. At a P/E of 15x, that would be 12p of added share value. Not a huge sum, but a nice bonus.
Another way to look at it is in terms of narrative.
Every penny of earnings per share that management can add, takes us a step further from 'shock drop in earnings' (e.g. 43p/share) towards 'new record earnings' (e.g. 48p/share)
TRS
