Ann: Half-Year Report and Accounts, page-12

Thanks goosmurf for your comments, I guess your post articulates better than I ever could my questions above.

Trying to answer my own questions and responding to goosmurf's challenge (excuse the rough and ready maths) and treating this is a utility (i.e. ex-growth), the current utilisation is about 70%. If H2 revenue is $26.7m we can round that up to $40m if they were at full capacity, or $80m for a full year.

Total operating costs in H2 were $23.5m so again lets round it up to $50m for a full year.

So net earnings are $30m when all existing capacity is utilised.

There's about 200m shares on issue, so at at a price of $2.40 that values the company at $480m.

So that's 16 x earnings for a no growth company. (OK, we can take out some $60m cash so perhaps 14x earnings).

IMHO this means that the market is pricing in quite a bit of growth or a takeover premium. But growth of course comes at a cost of CAPEX, so we can't expect a PE as low as 16 anytime soon.

So I guess I'm suggesting that this stock is reasonably fully priced at present, and whether the path to full utilisation takes 1 year or 5 years, it is fairly immaterial. We are still looking at a fully priced company until they invest in more capacity.

So can someone (a) validate my logic and (b) provide some guidance on the cost of providing more capacity (I assume it's now a little less if the can build on their existing infrastructure rather than starting from scratch?).