adl due for a very strong re rating

As a longstanding, long suffering and current shareholder of Admerex (ADL), I sat down and did some seriously detailed financial analysis and due diligence on this stock, and I believe the company is about to surprise everyone on the upside when their annual report comes out at the end of Feb 2007. I contacted their PR office to confirm their annual report will be out at this time.

For what it's worth, here's a summary of what I found:
1. The Swiss-listed Temenos shares which ADL own have strengthened from 11.35 CHF to more than 22.50 CHF since Admerex’ half yearly report was released This asset revaluation alone is worth about $8M to $10M extra to Admerex, or 3 + cents per share above the current ADL share price of 6 cents. I find it amazing that the market hasn’t factored this into the current price yet. . Check out the share price for yourself at www.temenos.com.

2. The current company share buy back aims to repurchase up to 18 million shares at prices between 6 an 7.4 cents, which shows two things: they believe the current price is undervalued and they have no cash flow problems. This buyback is worth approx half a cent premium to the current price, but more interestingly the sum of all these repurchases to-date has recently taken the combined ownership of the two largest shareholders, Mencius and ANZ nominees, to the critical 90% ownership level, which could trigger an MBO or compulsory acquisition of the company, hopefully at a nice premium to today’s price. Mencius, you may recall, is owned by Admerex CEO Kim Goodall and ANZ nominees’ holdings are rumoured to be associated with Goodall’s supporters or backers.

3. The company’s signed many new contracts in the past 6 months, but has remained quiet on the actual revenues associated with these new accounts. Based on my own earnings forecast for Admerex, I estimate that Net Profit after Tax for Jan - Dec 2006 will likely be around $2.9 to 3.9M, barring any unforseen write offs and including the impacts of the Temenos share revaluation. At a sector multiple of around 16, this would suggest a further price premium of yet another 4 to 8 cents.

Given all the above, I believe the shares should see a very nice re-rating upwards of 14 - 18 cents by the end of February/early March 2007, which is more than double today’s price of 6 cents.

Has anyone else out there looked at this stock recently? I'm happy to table my analysis, but not sure how best to do that. If anyone wants a copy they can contact me via email: scgay at netspace dot net dot au