Ann: Chairman's Presentation, page-26

I must say, I've done a lot of digging and it's very hard to find a situation where the SP actually reflects valuation range I come up with.

Given the first quarter update, I have:
- toned down the operating delta to 20% (instead of +46% from guidance)
- calculated implied integration costs, for the 1st half
- calculated implied PBT for 2nd half (based on 20%)
- factored in a CR worth 31.5m in shares at $1.60
- removed the associated finance costs related to now having this capital (interest payment reduction)

THEN, assume FY16 has no growth and no integration costs, and I come up with a P/E of less than 8...


Given the following, the debt-load is quickly becoming less of a problem
- Management have flagged a CR
- I haven't factored in amortisation of customer contracts (the cash is already gone - the charge doesn't mean much in this case)
- The CEO does not receive a salary, only dividends (no income if the company is making a loss)
- Chris Price (one of the execs) is remunerated based purely on performance (quite impressive actually - reminds me a little of Kevin Chin @ AWN)
- The management team have been buying
- 100% of NPAT is paid out and DRP is available

My valuation range comes up with a bottom end of $2.20... and given the facts, I'm being quite conservative.

More than happy to post my calculations or argue the specifics if anyone is interested.