I realised I had omitted the analysis for Frasers Centrepoint's (FCL) 7-year, 3.65% retail bond when it launched its Initial Public Offering in May. Since FCL announced its latest full-year financial results a week ago, here is the analysis according to Benjamin Graham's criteria of average earnings coverage and stock value ratio.
Earnings Coverage
| Profit before tax, fair value changes & exceptionals |
= $955.4M |
| Adjusted for: |
|
| - Deduct: Share of associates' & joint ventures' results |
= $279.4M |
| - Add: Finance cost |
= $186.2M |
| Total earnings available for covering fixed charges |
= $862.1M |
|
|
| Finance cost |
= $186.2M |
|
|
| Earnings Coverage |
= $862.1M / $186.2M |
| |
= 4.63 |
The earnings coverage of 4.63 times is above the minimum average earnings coverage of 3 times for industrial companies.
Stock Value Ratio
| No. of shares |
= 2,895.0M |
| Share price |
= $1.63 |
| Market value of ... |
...
