Business Impact: We view the result positively. In previous research we outlined major concerns over cyclical earnings and too much debt. The FY09 result shows earnings held up better than expected and net debt reduced considerably, to $49.5m from $59.9m in 1H09. This places the company in a better position to withstand the economic downturn. Forecast FY10 NPAT rises to $12.9m on this result, successful restructure of operations in New Zealand and divestment of loss making Trafalgar. Fair value doubles to $0.75.
Recommendation Impact: Recommendation is upgraded to Accumulate
NFK Price at posting:
45.5¢ Sentiment: LT Buy Disclosure: Held
