Still to be resolved is how I read the situation.The figures...

Still to be resolved is how I read the situation.

The figures stated are below the SSB revised forecast of last Tuesday.

For FY03, SSB was estimating (on a revised basis):
1)
Revenue of $164.5m. Previously, $179m.
2)
NPAT of $11.4m. Previously, $16.0m.
3)
EPS (pre goodwill) of 10c. Previously, 13.6c.

By way of comparison, NTG is now forecasting FY03:
1)
revenue of $140m.
2)
EBITDA of $15m (previously, $18m).
3)
NPAT of $7.6m.

Whilst NTG has offered "key driver" explanations for the downgrades, it means that most analyst forecasts will now either be downgraded, or further downgraded. It is also likely that the growth premium that many analysts were factoring into both NTG's business profile, and into its share price profile will now be reduced, or extinguished.

At a NPAT of $7.6m (implying NPBT of $10.9m, assuming 30% corporate tax rate), EPS is 9c (pre-goodwill, and pre-tax), and 6c (pre-goodwill, and post-tax).

In the current climate, NTG's fair price should be closer to 50c, but given that the market dis-likes earnings' surprises, a sub-30c share price is likely in the short term.

Are the results bad? In my estimation, most probably not. But the credibility and performance of management is in question. So too are the issues of governance (whether rightly, or wrongly). Going forward, the Company has to repair its business profile. Ron Nissen's appointment should affirm this strategy, but short-term volatility will abound, at least until the revised analyst forecasts are out.