Hi Psychiatrist, on my model I get earnings of around 16.5 cps for FY11. I think I have previously suggested that if all goes to plan then FY 12 could bring in earnings of around .21cps (thats very much an uppper limit very optimistic estimate however). Increase in relative half earnings from H1 to H2 will be driven by contribution from E3 acquisition, cross selling traction and further industry demand in data usage. When you are facing CAGR within the industry of circa 35% then if you can capture that growth your second half is always going to be better. Further growth options are very much at the companies disposal. The IRU liability is very much front loaded so the business (all things being equal) is going to be absolutely spitting out cash in 3 or so years. There will be no bank debt to speak of and obviously you will have your retained earnings to drive growth. My hope is that if management can deploy capital and reasonably expect to achieve R.O.E for new projects at anywhere near current rates, then keep the cash rather than pay dividends, at least for the next few years. On top of all of the that you have a very small number of issued shares providing the company at current prices to be able to raise a fairly substantial bit of cash without being to dilutive (assuming appropriate projects can be identified). To put the icing on the cake you have some very experienced players on the board and in executive management roles. I would love to be a fly on the wall in their strategy meetings.
VOC Price at posting:
$2.22 Sentiment: LT Buy Disclosure: Held
