The facts

The facts:

At the end of 2015 there were 133m shares and 31m options.
Up from 99m shares and 22m options in 2014
So at the current price of 12.5c that is a current market cap on 16.6m and 20.5m fully diluted.

Revenue for 2015 increased from 9.6m to 14.8m.
Revenue for the first half of the year was $7.4m so no revenue growth in the second half?
EBITDA increased from $2m to $2.5m. A reduction in margin from 20.8% to 16.9%
Net profit increased from $1.3 to $1.4m.
If you exclude government grants underlying net profit was -$0.2m, down from $0.2m in 2014.

Worth noting that the 2015 r/d grant hasn't actually been received yet. As they weren't yet registered with AUS industry and the claim hasn't been lodged.
So there is a risk that they don't get it...

For 2015 receipts increased from $12.8m to $16.4m.
2015 Positive operating cash flow increased from $0.7m to $0.9m.
Mostly positive due to "other revenue" but i couldn't find what that was made up off.
Interesting to see receipts are greater than revenue in both years so +OCF may be also due to timing of cashflows.

They had $1.7m Cash at the end of 2015.

At 12.5c they are trading on a fully diluted EV/EBITDA ratio of 7.5.

My opinion
I think the current price is fairish considering that 2015 EBITDA was mostly made up of government grants for R/D. Good to see continued strong revenue growth due to a mix of organic and acquisition growth. Disappointed to see margins fall, was expecting them to increase. But this is likely due to initial acquisition costs so should improve in 2016 and beyond. Was disappointed to see no growth in revenue for the second half of the year. If they manage to do $18.5m revenue for 2016, and 3.7m EBITDA for 2016 I think 16c or higher would be fair. However I would rather wait for the 2016 HY report or some guidance on revenue growth before buying in again.

PEH is prone to pump and dumps, visible on the chart and threads so all newbies DYOR.


Not advice