Alas this may be the last time I get to post here on LHD as we move over to AIM. For the record I already have a trading account in the UK so will be transferring the shares and holding onto them, and this is why.......
The accounts tell us great detail what we can expect in terms of profitability and cashflow from LHD over the next few years (once you strip out the various revaluation and tax adjustments). I have run the numbers through a spreadsheet and this is what I have come up with.
I have used the calendar year to December as it is easier given the numbers for the debt retirement in the half yearly report.
2013 EPS 1.95c Cashflow per share 3.26c 2014 EPS 1.72c Cashflow per share 4.59c 2015 EPS 2.05c Cashflow per share 5.08c
At this point all the debt has been repaid, so from this point on the numbers are:
2016+ EPS 2.99c Cashflow per share 6.50c
Assumptions I have made are - Oil price is $110 - AUD/USD exchange rate is 1:1 - Production costs are $850k per month as stated in the report - Depreciation and Amortisation is $14m per annum - Admin is $4m p.a although this should drop given that headcount is being reduced - No taxes as we have losses to be absorbed
I figure inflation will effect both revenue and costs so have not altered either one.
Whichever way you look at these numbers there is no way this company is only worth 5c a share and I think if they do a deal they will be looking for at least an amount equal to the next 4 years cashflow which should be about 20c.
I can't understand why people are selling now that things are looking very bright and will try and pick a few more up if the price dips close to the delisting.
Cheers Mackec
LHD Price at posting:
5.2¢ Sentiment: LT Buy Disclosure: Held
