EBIT of $11M or EPS of 3.3 cents forecast for y/e 30/6/08....

EBIT of $11M or EPS of 3.3 cents forecast for y/e 30/6/08.

Forward PE ratio is 9.

Dividend paid for the half is .75 cents or 7% before tax.

Balance sheet is good with $12M debt and $11M cash.

(Remember...look at the balance sheet!!!)

Dividend payout ratio is currently 50% therefore if forecast is met, dividend announced in August 2008 should be 1 cent, making the dividend yield on 30 cents = 9.5% gross.

Stock is cheap at the moment on forward PE ratio of 9 and dividend yield of 9.5%.

However in the current market, i cannot see this share worth more than 36 cents, placing it on a forward PE ratio of 11 and gross yield of 8%.

I think PE ratio of 11 and yield of 8% is generous in this bear market.