Even if there is no growth for the 6 months to 30 June over PCP then EBITDA would be $17.5M. I would expect it to comfortably exceed this. The company is also in the fortunate position to be net cash positive, and building rapidly. I estimate the PE to be currently be around the 10 to 11 mark on statutory profit.
Profit is of course aided by substantial deferred tax assets of $110M (2017) to offset against this year and future year profits. This tax offset will contribute to significant future cash flow. I expect that we should see a full year dividend of at least 1c per share unless an acquisition pops up in the short term.
Road/rail is a good space to be in at the moment and Engenco would be elevated to the All Ordinaries Index if it were re-balanced today. This re-balance occurs once a year in March, so we have another 9 months of being under the radar before the company creeps into the consciousness of index investors.
EGN Price at posting:
49.5¢ Sentiment: Buy Disclosure: Held
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