Given that the first half EBITDA was $1.9m (ex loan write off) a full year of $4.6m to $4.8m implies a second half EBITDA of $2.7m to $2.9m which is a pretty impressive lift. The cost cutting seems to have been effective on face value.
I suppose the real risk for the stock is that if the sale falls through completely then they will might struggle to pay the $6m to Macquarie Bank by the end of 2012.
The $3.8m deposit is due to be paid in 2 and a bit weeks by 15 July according to the original sale announcement so we will find out one way or the other pretty soon.
It would also be great if they made an official announcement on the distribution of funds and shares as well as the tax treatment. The ATO usually takes a few months to make final decisions on the tax treatment of capital distributions so you would hope that they have started making enquiries.
RNC Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
