AMU's web site has added the latest Euroz Securities report on...

AMU's web site has added the latest Euroz Securities report on AMU which puts a $1.00 a share target price on AMU.

The report estimates FY2005 net profit will be A$8m, rising to A$14m in FY2006 and A$15m in FY2007.

My view is that this seriously understates the expected profitability of AMU.

Their oil and gas production looks like it will double as a result of drilling success over the next 18 months - so profit could well double from that organic growth alone. And when ARF gets its two plants running full time, each plant is likely to deliver an annual profit of over A$8m. That too should kick in another A$2m in profits (AMU will hold 31.7% of ARF and the ARF prospectus states the company's intention to distribute 40% of profit in dividends. For just those 2 plants, this would mean A$16m*0.317*0.4 or A$2m per year).

The future looks pretty damn good for AMU holders.