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14.0¢ weststar industrial limited

Ann: WestStar Awarded a Further $5M in Contract Extensions, page-290

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simonjai

1,124 Posts.

178

01/09/19

11:16

Post #: 40265891
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Originally posted by Charterrierist: ↑

So, the report comes out Monday morning. Just thoughts on what my pass mark is:

1HFY19 loss: $1.4 million ($0.77m if you add back once-off $0.63m payment as part of SIMPEC acquisition).

So, a total year loss of $1.4m or less would mean a profitable 2nd half. My pass mark is a break even or profitable 2nd half which would suggest they are making significant progress.

What would send SP through the roof?

Let’s say $20m revenue at 20% margins so gross profit of $4m.

Expenses for 1st half was $3.4m. Take away the once off acquisition payment and doubtful debts and you get $2.6m. Factor in 10% increase of mainly fixed overheads and you get a potential EBIT of circa $1.1m for the half. That would mean a full year loss for FY19 of $0.3m.

That’s annualised EBIT of $2.2m.

Apply PE 20 for a high-growth company and you get $44m market cap or SP or around 7c.

In summary, if the full year result is anything close to break even or in profit, then boom 10c is possible.

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Sorry dumb question. Don't you normally calculate PE ratio based on NPAT rather than EBIT?

WSI Price at posting: 3.5¢ Sentiment: Hold Disclosure: Held
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Last 14.0¢		Change 0.000(0.00%)		Mkt cap ! $15.50M

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