They have to start making these acquisitions work for the business. In terms of R&D we need the cost to keep the existing platforms working and grow the business. The 1c eps number is irrelevant. The current cash flows in the business don't represent that valuation (10c). So for me forget the amortisation figures..what are your going to spend moving forward in terms of R&D per year and how are you going to grow the top line revenue number. I think currently the 10x EV/EBITDA is the correct valuation. If management can deliver some solid growth this should push to 12 x as it has lots of reoccurring revenue with a SAAS business model.
RFL Price at posting:
20.5¢ Sentiment: Hold Disclosure: Held
