Ann: Appendix 4E - Financial Report-RDG.AX, page-90

Yep, quite right oilnut. There's been a bit of enthusiasm here lately which has ignored the reason this is a speccy stock. We don't know the forward order book, and we require there to actually be work on offer in WA, which is out of the companies control.

That said, I think it's a good investment for a number of reason.

1. The cash in bank and net assets gives quite a margin of safety for the current share price and market cap.
2. In what has been a terrible two years in mining construction they've continue to be strongly cash flow and npat positive.
3. They've started to diversify out of pure mining construction already (note the $8 million in 'housing' that didn't exist in last report).
4. They've indicated they're on the hunt for acquisitions that should help this diversification. And they have the cash for it.
5. The directors have run this company (centrals, not rdg) for years and done a great job. I.e. they are clearly competent, and have all the industry connections/contacts needed to take advantage of any construction recovery.

The down side is minimal from current price. Things would have to go absolutely terribly in the coming period for rdg not to deserve a $20 million valuation. On the other hand, anything neutral to positive and they could be a 30-40-50 million dollar company quite easily.

So yes it's speculative, but I think it's a smart bet.