In the last quarterly they said they were undergoing DD on potential acquisitions .
Organic growth can only be expected to be 10-15% , so a CR must be to fund one or both of these acquisitions under DD .
The key for current holders like myself is that we want to see an acquisition that is complimentary to the existing business units , and large enough as far as revenue is concerned to create sufficient EPS growth .
The current market cap of $18 m at .45c is based on current shares on issue at June 30 of 43 million shares .
The current projections are for revenue to approach $20 m at an ebit of around 10% which equates to EBIT Per share of about 4.7c per share , so 10 times which is quite cheap for a growth company in the health care sector .
If they issue say 7 m new shares @0.40 to raise $2.8m and can add another $500k in EBIT , the number of shares will 50m and EBIT would grow to 5 cents per share .
On these numbers you would expect the PE to increase from 10 to up towards 12-14 times as EPS and all the key calculators would be up 2 years in a row and it would not be hard to see on that scenario 12 times x .05 = 0.60c share price in 5 -6 months as the numbers become evident .
On the other hand if the CR is not about growth , and is simply a means to reduce debt again or simply to boost cash reserves after they paid their maiden dividend out last month , I agree the stock could easily pull back to well below 0.40c, maybe even 32/33 .
PGC Price at posting:
44.5¢ Sentiment: Buy Disclosure: Held
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