CEY was one of the standout small companies of 2001 with performance driven by growing profitability following several years of low cost acquisition based production growth. Share price reached a record $2.50 earlier this year, a level which still only reflected a modest marketcap of $230m and a P/CF multiple of 6x. Recent price weakness appears to be a result of a sliding export thermal coal prices and a rising A$. We note CEY is well protected with a strong domestic focus accounting for over half the group's tonnages, a FY03 A$ locked in @ 0.526 and high margin export product. Once again recognition of earnings forecasts and realisation of the final dividend should see renewed market interest. CEY is close to being debt free, generating strong profits and free cashflow and can fund incremental growth from the existing balance sheet. We maintain our buy outperform recommendation with a 12 month price target of between $2.5 to $3ps.
CEY Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held