normalise the metrics

I was asked about AMA in another thread, so I decided to provide my answer (after reading the last annual report) in this thread. The last annual report is for YE 30/6/11, so the situation could have changed for the better, and I expect it has.

The figures for YE 30/06/2011 look better than the normalised situation. Normalising requires subtracting from the net profit after tax: a) the tax refund; b) the tax normally paid on $63,160K; and c) one-off legal wins. If you calculate the normalised EPS, you get about 1 cent.

A target PER of 10 is too high for a company with about $20 million equity, very low liquidity (ASA only has about one trade a day on average) and high debt (about equal to equity). A target PER of 8 gives a target SP of 8 cents. Today's closing SP was 14 cents, which seems too generous, for AMA, unless there are better metrics of which I am unaware, or I have erred in my arithmetic. I do not hold AMA, and I am not looking to do so, so I have not spent much time looking into this matter, and could easily have erred in my assessment.


Net Profit - - - - - - - - - - - - - - -- $10,238K
- Net Tax refund received - - - - -- $3,922K
- Normal tax (30% of $63,160K) - $1,895K
- Legal wins - - - - - - - - - - - - - - $1,600K
Normalised NP - - - - - - - - - - - - $2,821K

Normalised ROE - - - - - - - - - - - 21.81%

Shares - - - - - - - - - - - - - - - - 277529385
Diluted normalised EPS cents - - - - - 1.02c