competition in africa, page-8

The last boom in the radio section was in 2001 to 2003. Revenue per year for this would be in the region on $45-50M. Previous years were higher due to the SatCom sales (that got sold off in FY13) - SatCom sales boomed from 2004-2006 and then steadily declined to a loss making business.

The hope for large lift in sales lies purely in the Minelab business and does not look encouraging. Minelab sales grew from $50M in 2008 to $100M in 2012 and $150M in 2013. This also ties in with the price of gold moving from $800 in 2008 to $1800/1900 in 2012/13 prior to coming back dowm to 1200 to 1300. Excluding the gold boom and Africa upside, it looks to be a $70M pa business. Margins are also significantly lower now once the high end gold detectors have reduced in sales.

With reduced costs and flat sales, say they made about $7M profit for this half year (translating to about 4 cents EPS), this would look like a stock with a PE of about 8 to 10, dividend yield of about 6% (based on 50% payout ratio) with limited growth prospects.

Two good solid businesses with consistent revenue/earnings - the future for this company seems to probably depend on what management does next - the last two acquisitions have been woeful (Minetec and Daniels) and destroyed shareholder value.