The company is facing up to past mistakes with over-valuing WIP. This is a good first step.
It looks like FY13 NPAT will be breakeven, plus or minus a little. The company forecasts EBIT for FY14 of 25M, which equates to NPAT of around 15M - or 9.5cps. At present share price, this is a forward P/E of 5.5 which is probably fair given the uncertainty in the figures.
The big negative is future uncertainty about management’s ability to grow both revenue and profit. The positive for the SP is possible acquisition - although I think any acquirer would wait until the SP dropped, which means there may be limited gains from current levels.
NFK Price at posting:
54.0¢ Sentiment: ST Sell Disclosure: Not Held
