this is a feb 2005 report saying its a buy at .03 a shareon a...

this is a feb 2005 report saying its a buy at .03 a share
on a profit of $300,000 for the year.well know profit for the year will smash this figure.and the sp will reflect.you
can expect sp to be multipls of what it is today




Cunningham Securities

Level 1 City Arcade Office Tower, 207 Murray Street Perth WA 6000 ph: (08) 9322 9158 Fax
(08) 9322 1236
AR Cunningham T/A Cunningham Securities Holder of AFSL 258483 – ABN 51 660 823 396
Email: [email protected] webpage: www.cunninghamsec.com.au
West Australian Smaller Company Research 24th February 2005
Analyst: James Middleweek Tel: 08 9322 9158, [email protected]
TOX FREE SOLUTIONS TOX 3.0 cents BUY
Year to 30th June 2005e 2006e 2007E
Sales ($m) 5.5 8.0** 11.0**
Profit($m) 0.3* 2.8** 5.0**
Diluted EPS (¢) 0.1* 0.6 1.0
P/E (x) 30 5.0 3.0
EV:EVITDA (x ) 9.6 3.8 2.4
* pre goodwill write off
** assumes plant upgrades
Under new management, refinanced Tox offers new investors significant upside
potential, with far less downside risk than they may imagine. Rapidly growing
profits from the group’s waste treatment facility at Port Hedland already largely
underpin the shares at these levels. After a first half loss, we expect net profit of at
least $700k in the second half, based on the strength of current trading there.
The major upside is Kwinana. This site is no longer a cash drain on the group, but
if technical issues relating to its hitherto problematic thermal desorption unit can
be resolved, its longer term profit potential could be even more significant than
Port Hedland. That would support a share price a multiple of current levels.
Tox serves the ever increasing market for disposal of hazardous waste or
contaminated soil. Customer demand is not an issue. Stringent license
requirements mean competitors are surprisingly few. This ought to be a highly
profitable and highly rated niche.