excellent year, page-5

# Shares = approx 165m
Cash = 21.5m
Debt (this is weird I don’t understand why they are borrowing from associates) = 5.3m
Net Cash = 16.2m
Net Cash Per Share = 9.8c
EPS Per share = 1.9c

Adjusted Share Price for Business (ie SP - Cash)=
18c – 9.8c = 8.2c

Note a part of the EPS would be interest income related to the cash (about 0.4c per share) so
8.2c / 1.5c (adjusted EPS) = 5.46x NPAT.

Note also that recent NPAT affected by bad markets and lower investment income (they invest the float from the prepaid cards approx $145m). The 1.5m div would have been higher but for this. 5% of this float goes into risky assets. Fully expect that over the course of the next year they will allocate alot less to risky assets until the market calms down. Have no doubt they will continue to make adequate returns from more conservative investing. This is actually a good result compared to insurance companies which have a similar business.

One thing i'm not sure about is this new DEBT.

Never seen a growth company priced at such a multiple. Imagine taking a fee for electronic transactions in China which are set to explode as the country's middle class expands.

Depressed SP - I think its mainly to do with liquidity since most of the company is tightly held and untraded. Have a feeling FCP will eventually increase their stake (they have approval to do so already and the cash).

Now is just a waiting game.

PLEASE VERIFY MY CALCULATIONS YOURSELF BEFORE ACTING!!
MISTAKES COULD HAVE BEEN MADE!!

Would love to hear from anyone who is negative on this stock.