re: profit upgrade - low pe STS brought out a very nice report...

re: profit upgrade - low pe STS brought out a very nice report today.

It beat its recent profit and revenue forecast.

diluted eps came in at 9.2c for a share that last traded at 76c. that gives it a p/e around 8.

NPAT was $2.9m, but the operating cash flow profit was a whopping big $9.6m (and the net increase in cash held was $7.8m.)

STS has now resumed dividends after a long break since 2001, paying 1.5c in September.

All this cash flowing in will hopefully go towards paying off debt: their debt is around $8m which sounds a lot for a company capitalised at $20m.

STS is a turnaround stock, having diversified previously into a couple of dud business ideas.

They are now back on track and 2006 sounds like it will continue to do well, with already $79m worth of work in hand.

Their business activities are a bit hard for me to grapple with but basically they service the infrastructure, commercial building and resource sectors.

Their main line of work is post-tensioning - whatever that means! They recently won a $12m contract to post-tension 5 LNG tanks in Wales - that post-tensioning work sounds pretty lucrative!

Chatwise, STS looks great. since 2002 it's formed a beautiful rounded bottom and year-long sideways consolidation, which it has now convincingly broken out of.

Definitely worth checking out.

Cheers Anne