Thats not true Lindo. Capral paid quite regular dividends, once...

Thats not true Lindo. Capral paid quite regular dividends, once (and good ones I might add).

Davmarc, I think you are right. Credibility needs to be returns after a decade of poor performance. We really only started to see a turn with the advent of Phil Jobe. He sowed the seed. From this point they've got to start engaging the investment community because its going to be a big ride from here. The ability of the business to generate cash is its strength.

Materials companies, especially in the construction and building sector run hard and quick in a supportive environment. Construction and starts (despite property prices) has been relatively subdued and its only really been in the last 18mths that things have started to pick-up. With a forecast 12-14M EBITDA they easily be able to pay a 2c dividend. In this type of market where yield is driving stock prices you would have to think the SP would rise in-line with this; at least $0.40, implying a yield of 5% (still quite high).

The reason why EBITDA and bottom line NPAT are so disparate is because of the non-cash depreciation against equipment. This is a heavy machinery driven business - producing extrusions. Once the DA cost comes down the business will be a honey pot. Ive seen this in the building material sector time and time again. Its a wining formula.

There is not much risk I see on this stock to be honest. The presentation flagged rising costs (metal) but this will be more than offset by the FX rate and competitive power of Capral products. We have to remember that the primary input cost into Alumina (from Bauxite) is electricity, and as energy prices feed into product savings metal prices will abate. This will aid Capral.

This is all shaping up nicely for me.