whats going on, page-3

I bought in to FDY at 22c, so am obviously sitting on a nice loss at the moment. Today’s drop made me go back over my figures to make sure that I still thought there was significant upside.

My disjointed and amateurish notes are below.

Market cap
$9 million (56.7 million shares. Top 20 shareholders hold 75%)

2007 revenue
Total: $14.39 million
Brokerage: $8.66 million (60%)
Corporate: $4.6 million (This is probably going to be lower this year)

2007 profit
$3.24 million (up 243% from previous year)

Cash
$3 million from July 2007 report

Aug 2007 brokerage revenues were over $1 million. This is a large increase.

In November a poorly worded announcement stated that profit for the 4 months to Oct was running at 50% of the previous full year result. i.e. in 4 months they had earned 6 months profit (I know this isn’t exact, but it’s a reasonable guide) This was achieved on the back of increased brokerage, but decreased corporate income, as expected.

This announcement also mentioned that the employee share scheme would be costed at $1 million before tax for the year.

A December announcement says that brokerage is up 37% (would equate to $11.86m FY) and corporate is down 40% (down to $2.76m). So, if this trend continues we should still see a slight increase in revenue for the year. With the costing of the employee share scheme, this could mean a profit of about $2.5 million. The share scheme will also add some dilution – but this still leaves FDY on a P/E of around 4, with significant cash at hand.

Downsides: Illiquid. Lack of news, and poorly worded announcements could be confusing. Too small to get on many people’s radar. Downtrending.

I am still happy to hold.

Is there anything I am missing? I am not expecting the FAS/GWR merger to go ahead – but that could potentially add substantial corporate revenue.