yes I did include net debt of $110m, therefore market cap of $100m plus net debt of $110m gives EV of $220m. Company's guidance 2009 EBITDA of $100m, thus EV/EBITDA 2.2 times.
The net debt amount is my estimate, i.e. borrowed $150m, but had $27m cash at end of June, with two months since then at approx $8m EBITDA per month plus windfall $8m on surrender of Perth property lease, less some maintenance capex, interest etc.Thus I figure they will have around $40m cash now againgst $150m debt thus net debt at $110m (in all probablility they will have reduced the debt from cash but the net debt position will be pretty close).
By comaprison, IIN is 4.2 times EV/EBITDA based on bloomberg consensus, PWK is 9.5 times (Bloomberg) and I calculate AMM at 3.7 times ( blended between its 23% of IIN shareholding and its own business).Love to attach a graph of these numbers, but no idea how to import to the post.
Any way you care to look at it the stock is trading at a serious discount to peers.
There is only one broking house covering SOT , ABN Amro Morgan, and despite company's guidance they have FY 2009 EBITDA forecast of $65m, basically do not trust company's guidance, and report having communication problems with company's new guard! They need to gain greater coverage but, if not careful, appear likely to lose the only broker covering their stock! By comparison the other peers are all smaller in terms of profit and yet they have the following broker coverage contributing to Bloomberg.
AMM – ABN Amro and BBY (also Euroz)
IIN – BBY, JP Morgan, Merrill Lynch (also Euroz)
PWK – ABN Amro, Merrill Lynch, Wilson HTM
SOT Price at posting:
17.5¢ Sentiment: Hold Disclosure: Held
