baby and bathwater, page-21

Disco,

I would appreciate if you limit your comments to the company, this is an investment forum designed to cater for all views. If you are able to provide well reasoned discussion to refute my points, be my guest. I would like to get feedback on my current reasoning for those who know the company more intimately than I do.

Can you show me your working for a PE of 5.4.
I get a PE of 6.44 based on forecast NPAT this year, and if you use normalised profit (30% tax) the PE is around 7.5.

I forecast the book value to be approximately 38-42 cents at the end of this year. What is your estimate?

As per 2011 figures
Operating cashflow was $16.5 million, they spent $36.4 million on investing activities. The shortfall was funded by capital raising + option issue. I didn't state that they won't fund their capex, but that they may need to access more equity/debt funding to do so.

Disco, what is your required return from RQL, what premium to book value do you think it deserves, and with what justification?