Ann: PEA Half-Year Result Release Date & EBITDA Guidance Increase, page-6

Nice upgrade and the price held up today! It looks like management were being overly conservative with their earnings forecast which kept a lid on the SP until now. If the FY19 interest/depreciation/amortisation are in the ballpark of the 2018AGM forecast we should see an FY19 underlying NPAT around $23m and EPS of approx. 5.4c, giving us a P/E of around 12 times at today's SP. Not bad for a company growing it's EBITDA at 35%+!

@hfrench, I think you are overly pessimistic in your view that PEA should be valued at low multiples;

PEA took a hit of about $4.8m in acquisition costs and $9.8min impairments in their 'reported' FY18 results, so the likelihood of more oneoff costs related to the Contract Power acquisition, which was completed in 2Q/2018, in FY19 is remote IMO.

The Petra broker report forecast FCF of about $30m p/a for the next 3 years (and that was based on a forecast FY19 EBITDA of $55m and NPAT of $20m), for a FCF yield of 12%, so it should spin off plenty of cash going forward, sufficient to pay off most the existing debt if they choose to.

Not that I consider the current gearing to be excessive,with a forecast FY19 interest cover of 14x and a D/E of 63%, an overall cost of funds of 4.25% and a RoC of 10% I would be happy to see a reasonable level of gearing maintained, say around 50% D/E.

Once the analysists recomp their forecasts based on the increased earnings I think we will see their SP targets move up from the current consensus of 72c to 75c+, and as It looks like we will see a HY dividend I’m looking to an easy 70c after the release of the HY report on Friday 22^nd.