New broker report, page-7

Have been slowly accumulating PEH but have been trying to work out why the company's market cap is so low eventhough they have a great product and some very well known customers. Have come up with the following possibilities:
- they need 40 sites in Oz and 20 sites per reseller internationally to breakeven. Currently have 28 in Oz and a only a few internationally (as they have only just started selling Envirosuite overseas). I think the investing community are still waiting for proof that they can secure new clients quickly and easily before they commit their investment dollars. I wonder sometimes whether smaller companies will fork out extra cash to pay for envirosuite when their existing systems are sufficient to meet current environmental standards and regulations. Turning point could be the winning of Spanish and French customers. Time will tell... nevertheless, the Thames win in my opinion is quite significant.

- Is the savings and efficiencies from using envirosuite sufficient especially for smaller companies to warrant paying the annual subscription. Are there sufficient larger companies that will pay for Envirosuite? Obviously I'm hoping so especially considering the fact that Envirosuite has quite a few modules that can be used in quite a few different industries.

- waiting to see if Thames renews and uses Envirosuite for more sites.

- they currently employ 100 staff with 70 of them being specialists which is quite high for a small company like PEH. Results in high overheads but this should hopefully not be a problem if Envirosuite takes off as the margins for that division is much higher.

- uncertainty over the reasons for the sudden departure of the CEO. IMO, made worse by the fact that they did not have a replacement as it leads to the perception that the CEO left unexpectedly resulting in the company not having sufficient time to find a replacement. I'm hoping that the last CEO knew that his time was up and found another job before the company had time to find a CEO with the right international expertise and connections to take the company to the next level.

- lack of cash flow. Was personally disappoint they only raised 2+ million in the last capital raising as I would have thought that to expand aggressively internationally would require a lot more cash. Perhaps some are expecting another capital raising at around the current share price and don't see any urgency in buying PEH yet.

Hopefully the tremendous potential of Envirosuite is realised as soon as possible so that all shareholders generate some serious returns.

Good luck all.