NPAT in 2016 was $6.4m but that included $3.8m depreciation versus $5.8m investing cash outflows which are mostly for software development. I prefer to include these in my profit figure given they are a cost of doing business for software companies. Therefore, normalised profit for 2016 was <$5m in line with FCF.
For forward PE to be under 30 you are saying that FCF this year will be >$15m - I would be very surprised.
Even if you are right, I'd still question the logic of buying back stock at 30x earnings. Then again, they have a better idea of the value of the business than me but it would have to be a business of extremely rare quality for this to be justified.
PME Price at posting:
$4.53 Sentiment: None Disclosure: Not Held
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