After down 8%, P/E still 28, too expensive, page-60

My thoughts on possible 2H17 results:

* revenue towards upper end of guidance ($165-175m)
* similar FX impact to 1H17 (but only two months into 2H17 so could be volatile)
* expect better NPATA from both Solutions and HiAffinity (1H17 (both impacted by integration costs)

The 1H17 contribution of Solutions and HiAffinity is shown in the recent Half Year Accounts (Pages 19-20).

Solutions:
Revenue=$14.694m
Net Profit After Tax=$0.431m
Ratio=2.9%

HiAffinity
Revenue=$1.089m
Net Profit After Tax=$0.089m
Ratio=8.2%

The overall Hansen business for 1H17 was:
Revenue=$86.9m
NPATA=$15.3m
Ratio=17.6%

Now we can estimate the performance of the 'Hansen less Solutions/HiAffinity) as:
Revenue=$70.217m (86.9-14.694-1.089)
NPATA=$14.78m (15.30-0.431-0.089)
Ratio=21.0%

So how much improvement could we expect in Solutions/HiAffinity in 2H17?

* Solutions - Ratio from 2.9% to ? Let's assume 10% due to the low-margin Call Centre. Profit after tax = $1.486m ($0.431*10/2.9). Assume all integration costs booked in 1H17.

* HiAffinity - Ratio from 8.2% to 21.0% (Hansen average). Profit after tax = $0.684m ($0.089m*21/8.2*6mths/2mths). Assume all integration costs booked in 2H17.

So 2H17 could see NPATA increase by $1.65m from $15.3m to around $16.95m (+10.8%) from:
* Solutions = +$1.055m ($1.486-0.431m)
* HiAffinity = +$0.595m ($0.684-0.089m)

Enough to move the current Share Price? Probably not. Another UK acquisition at favourable exchange rates might help. Otherwise 1H18 might be the earliest we could see the FX negative impact on revenue
reduce significantly.

Probably a good time for long-term Hansen investors to accumulate and forget until 1H18!!!