Ann: Trading Update , page-11

saferoads seems to be a screaming bargain at 81c. What's the catch does anyone know?

The only bad things I could come up with were

(a) $8m in debt which is a bit high for a co. with a market cap of about $21.

(b) their decision to suspend div for last two halves, while they concentrate on gtting debt down and earnings sustainable.

(c) revenue for first half was down 8% on previous period.

The good things were:

(a) NPAT of $2.5m = eps of 9.8c

(b) operating cash flow higher than profit

(c) current assets much larger than current liabilities

(d) a history of ever-increasing profits ( apart from the 2009 horror year)

(e) no evidence that the business is seasonal so hopefully second half results will at least match first half (I couldn't find any clue for a forecast for this half)

(f) business benefits from a strong Aussie dollar - and they've got that!

(g) servicing the builders of our roads seems to be a good industry to be in at moment with increas in spending on roads???? although i'm not sure about that - maybe we've stopped building roads for a while!

So, if SRH repeats its first half result, it will be sitting on a p/e under 5! That's a bit lousy!

So what's the catch?