Octain, how are you getting an NTA of 30 cents per share?
There will now be 1,367m shares on issue.
Net assets are currently $230m and will be $385m after the capital raise (see page 26 of the investor presentation).
So, net assets per share (tangible and intangible) will be 28 cents per share.
Of the $385m net assets, $320m will be goodwill. So taking this out to get net tangible assets (NTA), we actually get a low 4.75 cents per share.
So the story doesn't look so good from an NTA perspective.
From an earnings perspective, after the dilution, earnings per share will be about 2.2c...so a 15c share price is a P/E of slightly less than 7...not too bad, but not super-cheap either.
Based on this, I would say that it will probably go to 20-25c at the most on current earnings. Further share price growth will really need to come from ongoing margin improvement and continued contract wins.
But there's probably little downside risk from here too...so purchasing at 15c to sell at 20c in a year's time is not too bad.
HST Price at posting:
$1.45 Sentiment: Buy Disclosure: Not Held
