That chart is totally meaningless without some understanding of the business. There is a difference between growing earnings through acquisitions funded by cap raisings and raising capital to keep the lights on. There are plenty of issues around the growth through acquisition strategy (
there's even a thread about it), but you need a bit more meat on the bone than "company growing through acquisitions issues lots of shares". That's just the bleeding obvious.
You seem to just cherry pick whatever data point will satisfy the view you have already reached. Like below with your use of revenue...
MYX paid 6x EBITDA for Teva and Hikma paid 8.3x EBITDA for Roxane ($US2.1b for US$725m revenue at 35% EBITDA margin), they were initially going to pay 10x EBITDA. So who got the better deal? Like I said, Sharebase dilution is pretty meaningless stat on its own, all it does is tell you the company issued shares. Like everything else it needs context, not a pre-conceived narrative. Hikma diluted their share base by 16.7% (again itself not that important a number without some context), but also forked out $600m in cash.
I'd expect any company whose business is in pharma to have the overwhelming majority of their assets in intangibles.
No, if there's one chart that could immediately tell the investor whether a company has been good for their wealth or not, it's that one. It's a given that when investors contribute cash to a business, they ought to get a return - that the company makes money.
Mayne has made a few cents on the dollar for their shareholders all these years.
True that an investor need context, need to understand the business, know where it is in its life cycle to make a more "understanding" interpretation of why shareholders haven't made any profit yet. But...
For a 7 year old company [I'm ignoring the Halcygen years, the other years of operations from businesses/products MYX acquired]... After all those years, with $1B of shareholders equity, we're still asked to kind of ignore the past performance, look to that brighter future full of possibilities?
It's a $1.5Billion company. Its main business is selling boring, generic drugs with established markets and a customer base. All it needs to do is be good at manufacturing and logistics... and a few bucks here and there for R&D to differentiate through different dosage or colouring.
So for a $1.5b company operating in an established market, taking in $1B of shareholders fund over years... for that company to ask us to wait for it to bloom. That'd be like me asking you to put money into my training for the Olympics 100m sprint. Possible, I wouldn't put my money on me qualifying though.
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Hikma's purchase was far more superior to Mayne's Teva/Allergran. For one thing, Teva gave Mayne the IPs. No inventory, a year's consultancy on that pipeline of work and technical transfer for $35m?
Sales from the new portfolio being some $US235m? Compare that to Roxane's FY17 estimate of $US700-$US750m.
The Roxane purchase push Hikma to 6th place in the US generic market by sales. It comes with all the labs and the brain trust that's been working on the new portfolio just acquired, as well as the R&D team currently working on that 89 or so products with a market potential of some $US41B [vs Teva's potential of $US7b].
Then there's the 16.7% ownership from Roxane's parent company. It's a bit safer for Hikma's shareholders' sleep if the seller is willing to climb into bed with them too. To hit and run like Teva/Allergran... possible that they're "forced" to sell their best products and Mayne is lucky to be getting it. That's remain to be seen... all shareholders have seen is that they've just had their ownership diluted by about 40% from the acquisition.
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There are circumstances where dilution of shares can be reasonable. But to do it year after year so that the company can have money to acquire, expand and "grow". That's not a $1.5B company.