valuations, page-16

I'll definitely agree that EBITDA is much more important than NPAT. CUS has substantial depreciation & amortisation that would be much higher than the real replacement cost. A couple of other things:

1. If SP remains where it is there is a chance they will get dropped out of the ASX300. This might put a hold on the SP as some funds are forced to exit;

2. Market might be anticipating a capital raising to sure up the working capital position. I notice in the FY2007 accounts that they were heavily using the overdraft. Maybe this was a timing issue so not relevant. However, if cash flow is marginal (whether positive or negative) given the number of pies CUS has their fingers in they may need more dosh (ie. NZ venture; China)

In principle I do like this type of business: it should be able to generate a stable income stream. But with the market we are currently in anything more negative will not be taken well.

Not just CUS, but hard to see any stock that disappoints the market being re-rated at the moment.

I'm just providing an alternative view point to consider. I'm not in a position to buy regardless of price or expectations.

MJS