excellent half yearly results

DWS has truly beaten market expectations IMO with a half yearly profit result of $6.8m.

The really exciting number that stood out for me was an increase in the NPAT margin from 20% in 2005 to 24% in 2006/2007.

While revenue was up by 45%, NPAT after adjustments increased by 66% because of the significant margin increase.

They forecast a NPAT of $11.1m in the prospectus for 2007 and have managed to achieve a result of $6.8m in the first half alone!!!

Their revised forecast of $60m is extremely conservative IMO as they generated revenue of nearly $30m in this half alone.

If you look at the 2005 half year revenue they generated $20.4m which turned into $45.5m for the full year.

This suggests that DWS's revenue is weighted towards the second half of the year which could lead to revenue in the region of $65m-$70m, well in excess of the revised forecast of $60m.

If this occurs and they maintain their margin at 24%, NPAT looks like coming in at $15.6 for the full year.

At 25 times earnings (this is what their major competitor trades at), this gives a share price of close to $3.00.

Good times ahead .....

Any other thoughts?