After a short period when buyers held off hoping there would be...

After a short period when buyers held off hoping there would be some tax loss selling, this morning they have started overbidding each other to be first in the queue.

It is just a matter of time before PHG goes skywards.

On December 13 2007 they stated they would have $31 million annual turnover after last acquisitions that were settled on April 4 2008. After improved efficiencies I would now put that at $34 million. In the same December presentation that also stated they would achieve EBITDA on turnover of 12% - 15%. That means they are now on target to earn $4 - $5.1 million in the next full year. Industry average P/E is 16:1 but lets give them a P/E of 10:1. That suggests a SP of 30 cents to 38 cents. Industry average P/E would put SP at 48 cents to 61 cents.

PHG have already disclosed in the half year report issued on February 27 2008. That fact can be discerned from the directors' decision to book the Deferred Income Tax Asset of $155,872 and the absense of any qualification on that point in the audit report. That figure of $155,872 is the difference between EBIT $638,132 (loss) and Net Loss After Tax $482,260 and represents the future tax benefit of carried forward losses. Deferred Income Tax Assets can only be booked if there is virtual certainty that there will be future profits earned against which to deduct carried forward losses for tax purposes. That requires that there are profits currently being earned.

Back to the December 13 2007 presentation, they also stated that the next tranche of acquisitions due this year would take annual turnover up to $100 million.

Get onboard before its too late.