where are we?, page-8

On the contrary, the level of profitability is very important. As a base case we have revenue of $17m for FY10 (note that they are forecasting greater than $17m but it pays to be prudent). With $2.1m EBIT. (Searchworld $2m, Webfirm 0.1m, Media breakeven) Last time I looked the company had no interest expense, so we are looking at approx 1.5m NPAT after tax. (of course they may not pay tax due to prior years losses but it's prudent to normailse for taxes).

That comes out to a little more than 1c per share in FY10 earnings. Return on equity also looks good. Based on these numbers the valuation is north of $0.20 IMO. Of course there is upside if the base case is exceeded. The company has wisely been prudent in their forecasts. Let's hope they under-promise and over-deliver.