Ann: Sale of OzSoft Solutions Pty Ltd, page-22

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25/05/15

12:31

Post #: 15344497
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Originally posted by bensk ↑

I think you are spot on with that analysis Damo. If revenue 50 to 60 and margin remains around 22% then profit of $10 to $13 million is spot on. Put this on a PE of five times (until they reestablish their credibility in the marketplace) and you have a cap of between $50 to $65 million. Share price mid to high 20's. Once credibility and growth reestablished then the market can take this to 10 to 12 times quite quickly. Stewart Cummins is a very smart operator and even though this will take time he will go to great lengths not to over promise and under deliver. I believe there are smaller institutions sniffing around to buy in and this should happen once the new guidance and earnings are affirmed. Remember any result going forward will be very clean in that there will be no tax to pay, and very little depreciation and amortisation(as everything has been written off last year). From my analysis of this industry it has gone through an incredibly tough twelve months (with Vocation wearing the majority of the negativity), however the industry has enough room for everyone to have their niche. Inevitable consolidation will then occur. I disclose that I have a position on this stock before this next comment:
I have seen companies like this go from nothing to something very very quickly in the past. Take Billabong for instance. They had massive debt, massive amount of shares on issue, had a $500 million raising to save them AND the stock went from 10 cents to 60 cents over six months!!!!
The beauty of Vocation is that after Vtrak is gone they will have cash in the bank, no debt and only 230 million shares on issue. A market cap of $30 million now with approx $10 million cash---enterprise value of $20 million!! This is ridiculous!! Admittedly there is the issue of the class action however it is my belief that Cummins will sort this like he has done in the past and strike a satisfactory deal.
This company is about to become a very clean structure and an incredibly cheaply priced entrant in the vocational sector. For gods sake there are mining companies out there that are five years from profitability that have a market cap of $100 million---this is a no brainer in my humble opinion and I will be backing the man just as much as I will be backing the company and the sector it plays in. All the best to everyone buying this.

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Nice analysis there.

Has there been any quantification of the potential liability of the class action? What's the worst case scenario here?

VET Price at posting: 14.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Ann: Sale of OzSoft Solutions Pty Ltd, page-22

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