conservative valuation, page-7

In 000’s

2003 2004 2005 2006 2007

Revenue 16,564; 27,684; 50,341; 81,564; 135,018
EBITDA 7,411; 16,494; 31,522; 54,945; 89,514
NPAT 3,339; 5,353; 7,319; 14,547; 19,631;

Total Assets 17,052; 43,031; 56,351; 123,622;205,788
Total Liab 4,098; 22,082; 33,493; 81,009; 139,638
Net Assets 12,954; 20,949; 22,858; 42,614; 66,151
Shares(000) 31,914; 37,056; 38,455; 41,445; 43,257

EPS (cents) 10.469; 14.890; 19.153; 36.212; 45.62
DPS (cents) 5.10; 7.45; 10.75; 18.00; 23.00

P/E 8.5; 14.76; 15.66; 19.6; 26.8 (est)

SP FY end($) 0.89; 2.20; 3.00; 7.10; 12.25


Current Forecast 08

EBITDA $83– 87M
NPAT $5-12M
Market Cap about $40M
Shares on issue 43.2M (est)
EPS 11.5 – 27.7 (est)
DPS 5.75 – 13.85 (est)
P/E 3.2 to 7.9 (est)
SP .91


Credit Issues:
Line of Credit: $160M only $125M currently used.
Term: 2 years, expiring 3 January 2009
Security: fixed and floating charges over the company’s assets
Margin: 0.95% margin to the BBSY for the corresponding interest period whilst the gearing ratio is less than 1.75:1. This margin increases as the gearing ratio increases, up to a maximum of 1.45% with a gearing ratio equal or greater than 2.5:1. The company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap contracts. The notional principal amount of the swap contract is $75,000,000 fixed at BBSY comparison of 6.455% and settled on a quarterly basis commencing from 31 March 2007 until 31 March 2010.

So based on their current projections we have a PE somewhere between 3.2 to 7.9. Whether they will still pay a dividend is question still up in the air, I guess we will have to wait until Thursday. I am hoping for a half year div of about 7c per share based on half year profit of $6M and previous dividend ratios. Div yield of between 7.2 – 15.22% at current SP should boost it above $1.15 at least. I can’t imagine the announcement on Thursday having any more bad news and this may be a catalyst to rally the market?

I have bought in yesterday and will wait and see. Let me know if you see something I don’t and I am no expert.