Net profit for H1FY16 is $10m so lets assume a small uplift and say $12m in H2FY16. That's $22m for FY16. $12m / 711m shares gives earnings of $0.016 per share. On today's SP, thats a P/E of 88. That's really high and usually implies huge earnings growth. But the point of the this exercise is to assume little to no earnings growth in FY17 (for reasons outlined earlier) which means it's very hard to accept the high PE and therefore the current SP.
Investors and instos looking for value and income will avoid this like the plague. With only 1.6c EPS, how much can they afford for a dividend? Half that? Even if they offer 1c per share as a div, that's a yield of less tan 1%. You may as well stick your cash in a bank account - not even a high yield account.
Only speculators remain at this level.
A2M Price at posting:
$1.42 Sentiment: None Disclosure: Not Held
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