Re: poll26 Mar 2007 12:16
This was mentioned in the TAN recommendation the other day, only recently floated on AIM it looks like a good investment to me. The share price is above that at the placing in December, but not ridiculously so. An RNS in January said prelims due in April were likely to be in line with expectations. These are for profits of £2.9m, rising to £5.6m in 2007 and £8.3m in 2008. That would put them on a forward P/E of 13 for 2007 and 9 for 2008, a low rating for a company expected to grow at such a rate. I would have thought a 12+ rating for 2008 would be fairer, putting the likely SP at 128p or higher, around 30% up on the current price.
Interesting market sector too, packaging, and unlike SEO it already has contracts with the likes of Tesco, Asda and Sainsbury's.
One point of note from the placing release:
The Company intends to use the net proceeds received from the Placing to fund a significant proportion of the cost of implementation (including capital expenditure) required by the new contracts it signed in 2006 with GS S.p.A.
(Carrefour) and Ortofin S.r.l. in Italy, and with a supplier to Wal*Mart in the USA.
Buy some now and come back in a couple of years.