Hi Vic_Wattle, I think NPAT will be significantly north of $1M....

Hi Vic_Wattle,
I think NPAT will be significantly north of $1M. The company has a history of under promising and over delivering. The trend has been for the company to make the larger profits in the second half (this makes sense as schools repay liscencing fees for the school year in this period as I understand). I hate making on-hunch predictions however I would not be surprised for NPAT to come in around the $1.2-1.5M mark considering the company made $585M PCP and are tracking 30% up in revenues.

I have been trained to value companies completely different to you but I think your general idea that the company is significantly undervalued is correct!

The key thing to note is that the company has sustainable competitive advantages that will secure future cash flows (customers are sticky, business is scaleable etc). The only issue I have with the company is that the stock options are overly generous however this year Mark Fortunatow probably deserves more than a handshake. I am yet to make a judgment on how I will vote when the final numbers come through and what the strike price is. Currently the company approves to 3% of options every year and in my opinion this is too much at such low strike prices when the business model has been demonstrated to work!

I do own a lot of shares in the company though so take my words with a grain of salt