Revenues should be $500 million for FY 12 as forecast in the AGM...

Revenues should be $500 million for FY 12 as forecast in the AGM report. They also note the forecast for last year was $350 million, so it was exceeded by $70 million last year. It could be much higher than $500 million in reality but lets be conservative.

Net profit margin last year was 9.2%, this equates to $46 million NPAT on $500 million.

Lets say 84 million shares are on issue being conservative (there could be some more option issues).

That's 46/84 = 55 cents per share

Profit margins could be higher as it was impacted by the Ghana tax hit last year, at 10% it is close to 60cps.

Lets assume Revenue is $550 million, you can add 5cps to the above figures.

Downside risks are lower margins due to bad pricing or increased competition, FGE have stated in the past they believe they can maintain margins based on their fleet of capital equipment that is all in house and their vertically integrated operating model so let's hope for 10% or higher!!

There is competiton in this industry but the work is so abundant I dont think anyone is being squeezed, FGE dont book orders years ahead so they are also insulated from labor or material price rises to a degree. Some companies locked in contracts on really small margins in late 2008 when the GFC was rife, seems to be smoother sailing now.

On top of all of this their is a chance FGE may acquire a company to boost earnings, if not their $100 million is earnign nice interest anyway.