I speculate this buy-back is a confidence vote by management on how the business is travelling. An on market buy-back (within 10/12 limit look at line 1) is pretty silly why would they state that? I'd be buying back up to 20c if I thought revenues were growing. The key here is that if revenues increase again or better yet accelerate we could be looking at a large increase in NPAT margin but with a drop in revenues it could easily turn into a loss. I reckon the former is more likely. With increasing revenues my current estimate of value is 30c (the operating cash flows / cash receipts margin is actually quite big) but with a drop in revenues 5c again I think the former is more likely.... pretty decent risk/reward if I'm right.
KKT Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
