b2 - for you

I said that I would look at CNB for you. Unfortunately the Annual Report on ASX is not readable. The company is too clever. They obviously decided to shade the current figures but they are impossible to read.

I did manage to glean over some material on Comsec. At this point in time the company looks fine - they report a positive cash flow of 40.5 cents in 2002. From my calcs. the company is also earning cash above the cost of capital for 2002. I estimate that if the company manages to maintain that cash flow the market price should be well over the $2 mark. However, that is where the problem lies - the future cash flows.

The reported cash flows for the past few years might give some indication on future events - (19.4) cents in 2000, and 31.2 cents in 2001. The EPS figures also indicate a similar performance - 8.5 cents in 2000, 26.6 cents in 2001 and 41.4 cents in 2002. The issue to ponder is whether the company has benefited from the Government's home grant. It appears that there may be some correlation between the two.

However, you must also consider that Guiness Peat have about 69% of the company. That must be a good thing. I have not managed to look at the company strategy nor have I looked at the business model in any depth.

For my liking the company is one to watch.

This is only my opinion. The decision rests with you.