Hi all,I have had a look at this company and feel it is very...

  1. 6,072 Posts.
    Hi all,

    I have had a look at this company and feel it is very expensive on a PE basis. Trading at around 13 times based on FY11 results. I imagine that FY12 is not going to improve with the re-structuring costs.

    Furthermore net debt has increased from $31.5m as at 30 June 2011 to $45.5m as at 31 December 2011.

    If you take a closer look at their most recent cashflow statement (31/12/11) you will clearly see that $10.5 million in dividends paid to shareholders has effectively been financed from $15m in borrowings during the half.

    NPAT margins to Reveune is a lousy 4.4%. You can get these type of margins and well above with secured order books on any mining services company.

    The only immediate to medium term upside if there is speculation of a takeover and/or is actually taken over but I can't see that happening.

    This company is going nowhere in my opinion for sometime but I guess the market will determine that.

    Good luck.
 
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