Here is what I think this means for investors. We know the price for a test is €3,000 and the commission is €500 and that the partner pays all costs associated with the test. We know test numbers rise by 1,000 per annum and the contract is 'take or pay' so EBIT is locked in. Therefore 51% of €2,500 is €1,275 @ EUR/AUD1.68 = AU$2142 EBIT to IVQ Year 1 = AU$6.426m Year 2 = AU$8.568m Year 3 = AU$10.71m Year 4 = AU$12.85m Year 5 = AU$15m With around 575m shares on issue at a no growth 10PE this contract alone justifies 11c per share. This is a very good deal adding risk free EBIT. There might be some drag as non contract numbers take time to ramp up and there will be some further dilution from the incoming Chinalink funding however it shows the operational leverage and I would expect further deals such as this to be added over this year.
IVQ Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
