BNT looking good. Company reports $6 million NPAT for 05/06....

BNT looking good. Company reports $6 million NPAT for 05/06. ShareAnalysis has a price target of 60 cents. Report from Sept 7 issue of ShareAnalysis posted below.

Cobby

Bounty Industries (BNT);
New Contracts & New Equipment
Bounty has announced that it is close to finalising a new thin-seam coal mining
contract at CapCoal’s German Creek mine in the Bowen Basin, where Anglo
American is a major shareholder. StockAnalysis Volume 2 Issue 13, pointed to
the company’s ongoing mining activities in the region, predicting that a new
contract would eventuate.
Timing for start-up of this work appears to have slipped by about a month, with first
coal now expected in November. It is in the nature of this type of work that things take
longer than expected. Logistics are always an issue. Organising for the movement of
people and equipment, along with securing regulatory approvals in this highly safety
conscious industry, always takes longer than budgeted.
Bounty is in the process of securing additional, thin seam mining equipment from
the USA to meet expected demand for additional tonnages of coal. There appears
to be strong interest within the coal industry in adapting thin seam mining
techniques to Australian conditions however, Bounty faces the challenge of
ensuring that it has sufficient skilled miners to undertake the tasks for which it is
bidding as well as ensuring that it negotiates contracts which will provide
adequate return to the company.
Bounty will need to marshal its finances carefully in the short term. Presently the
company is applying funds to new equipment and training, ahead of generating serious
operating cash flow later this year and in early 2006.
StockAnalysis plans to update its earnings estimates once the company’s accounts
for FY 2005 are known. Earnings for FY 2006 are forecast to fall short of the
estimates contained in the 27 July, StockAnalysis report, with current estimates
centring on a profit of $5.8m or 7.2 cps for this year.
Bounty remains a buy with a price target of 60 cps by mid 2006.