Ann: Appendix 4E for year ended 30 June 2015, page-11

First 11 Last

Share
Profile

Follow
Harm

599 Posts.

10/05/16

15:27

Post #: 17725566
Share

Originally posted by nihilism ↑

Nice stock pick 370830,

just a couple of things I'd watch out for. Their annual report shows that the 3million NPAT was in fact as good as it seems.

Firstly, they only made 1.9million profit in reality, the other income (~1.3mil) came from the leftover borrowings and proceeds from the acquisition last year.

In reality, they should of paid this back and declared a nil-balance, thus this is an accounting profit rather than a 'true profit'.

Once this is taken into account this share looks expensive on a 5-year financials basis however they have done an impressive turn around in profit margin, going from ~15million revenue and 0.5mil (2012) profit to 12million revenue and 1.9million profit.

The other technicality they have over-stated is their NTA gain. They only increased their assets by issuing share capital, a lot of it in the last year. While it sounds great to have a 'total assets' of XXX and net assets of YYY in reality they have simply pulled wool over the fact they have 18million debt rather than 7 last year (11million increase) and have issued $18.7million worth of shares.

They have nice growth but their current PE is sitting around 40 on actual profit (although it'll appear like 24 on all the broker reports, because of that accounting) and their EV PE (PE based on EV) is sitting around 50.

The acquisitions they have made will have to pull some serious growth to kick-start the next uptrend IMO.

Expand

How are they tracking now?

EGH Price at posting: 70.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

What's causing the cost-of-living crisis, and how to navigate it

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

M4M

Macro, Norden set up transport solutions initiative for West Pilbara