I thought it was an encouraging annual report too. They are...

I thought it was an encouraging annual report too. They are anticipating a massive increase in revenue to 200m because of the Bloomer purchase and they are expecting the EBIT margin to be 3 to 5% of that figure suggesting an EBIT of $8m. The company has total debt of $3.265m but the net cash after taking off that debt is 5.321m so it shouldn't be paying any net interest on debt and also the company has accumulated income tax losses of $30.7m which it is hoping to use to stop paying taxes. All in all the Net Profit after Tax could exceed that $8m EBIT forecast. The current market cap is 32.74m so we are looking at a Price Earning ratio of under 5 and this is the first full year of using Bloomer.

I was a bit surprised that there appeared to be no mention of the deal they have with Meadowbrooke which recently got preliminary approval from the Capel Council for their development plans. I have also been told by a mate who lives down near the Meadowbrooke site in Boyanup that McGrath has provided two new houses on the site recently, so it is starting to take off. It was almost a year ago that this contract was announced and the Chairman at the time said "The estimated sales value of the homes is approximately $40 million and has the potential to underpin McGrath’s order book for the next three to four years." Strange that there are no comments about it now when it appears to be starting off.

GPASAS