PTB Group Ltd. (ASX:PTB) Dividends & Dilution

An anonymous commenter suggested I take a look at PTB Group Ltd. (ASX:PTB), a provider of aircraft engine servicing, spare parts and leasing in Australia and the US. The business is going well with half year 2019 earnings up 73% to $2.3 million. In particular, the recently launched North American business continues to show promise.

I am not interested in PTB at current prices because I think it is a poor quality business. It generates low returns on capital because it invests heavily in fixed assets. The company has paid out 21.7 cents in dividends since 2013, but the share count has risen from 32.2 million to 74.9 million over the same period. PTB's share price is 67.5 cents which is 66% lower than its 2006 listing price of $2. It is mostly still run by the same mob who floated the company back then including current managing director and former exec director, Stephen Smith, current chairman and former managing director, Craig Baker, and non-exec Andrew Kemp.

Comments

  1. I looked at PTB a while ago when there was a bit of buzz about it. I also struggled to find an investible business at current prices. The other thing that worried me was I simply didn't know enough about the aircraft industry to know whether PTB actually had a long term sustainable business.

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