So VMX was just break even on profit after tax, but EBITDA of $1.1 million and cash inflow of $2.55 million, so net cash on the books. That was on half year revenue of $30 million and they expect over $40 million in second half so it should earn a reasonable profit for the full year, given overheads were $3.2 million in first half, excluding finance costs and depreciation. That seems to imply a pre-tax profit margin of 11% excluding overheads. So if overheads unchanged and margin holds they should earn about $1.2 million pre-tax for the year, or post tax around 1 cps and a PE of 11 at the current share price. Seems reasonable until they deliver.
If they can do $80 million the following year they start to look cheap, with $2.2 million pre tax and $1.54 million post tax depending on the tax rate. That gives closer to 2 cps earnings and a PE of only 5.5, with the possibility of a franked dividend (sat 1 cps giving a yield of 9%). We need more evidence they can deliver and signs the order book for next year is strong, but it at least seems they have turned the corner into profits.
VMX Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
