At $2.00 the PE is probably 10x or less. Underlying EBITDA at top end of guidance is around $28.8m (i.e. $27.5m EBITDA less $3.0m of non-recurring income, plus $4.3m of one-off costs). I think we should use top end given management track record of conservatism in providing guidance / beating guidance. Assume D&A of $6.4m we get underlying EBIT of $22.4m. Net interest maybe $0.8m, so we get NPBT of $21.6m. At a 30% tax rate that gives us $15m NPAT for the half, up from $9.3m in pcp.
The announcement implied some improvement in earnings in 2H.
So I think we should use $30m NPAT for FY16 as, conservatively, the right number for the year. That's EPS of 20.0cps or 10x PE at current prices. Given management's multi-year track record of solid organic EPS and DPS growth, surely a higher PE is warranted. 15x? which would give us a share price of $3.00.
So there would seem to be plenty of upside even for those buying in to VTG now.
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