chairman's address

One thing’s for sure, the RHD board are unlikely to be winning any prizes for investor presentations. A one page chairman’s address was all that was released to the ASX for the AGM. But all is forgiven - first quarter is trading ahead of last year and they’ve signed up a few new clients. Of course we’ll have to wait until the half year before we know how far ahead of last year they are.
The company shares are still pricing in a no growth (or perhaps negative growth) outlook but I think a return to the previous dividend payout ratio will give the share price a good kick.
A few quick facts:
- current market cap of 30 million
- EBITDA of 12 million
- EV/EBITDA of around 3 but maybe slightly higher depending on what debt you include in your EV. I don’t include the current liability bank debtor finance.

Now if trading is ahead of last year and we factor in the costs savings (interest, employee expense) then the current year has got to be looking pretty good. The stock PE(on last year EPS) of just over 7 is cheap for a company that might be back on track to grow earnings/margins – obviously the company earnings growth(or lack of it) history sits heavily in most peoples minds (the few that are still interested). Note: the EPS (and PE) and heavily affected by the large software amortisation (much larger than previous years) and should be taken into account when thinking in terms of PEs.

It’ll be interesting to see if there is any director buying in the next few weeks. It’s bound to be a good sign given the lack of detail on first quarter earnings.