No worries Marcus. As ZEN have only been on the ASX for 18 months there isn't enough publicly available accounts data to have a picture of how they've performed through the same cycles as PEA. Looking forward, I don't have sufficient understanding of this business to understand whether there is some characteristic of ZEN's management or business model to justify their apparent premium
Yes - my prognosis on PEA is cautious. I do believe, however, that there is limited downside in the next couple of years due to the long term nature of its contracts. I also think that the company's own earnings forecasts for FY19 are conservative. My own are as follows:
Revenue: $79.6m + other income $0.7m
Operating Costs: $23.2m (made up of consumables/parts $6.9m, employee benefits $12.4m and other $3.9m)
EBITDA: $57.1m
Depreciation+Amortisation: $22.2m
Interest cost: $4.1m
NPBT: $30.9m
Tax: $9.3m
NPAT: $21.6m
Free cash flow: $23.1m, FCF yield approx. 9.4% at today's $0.57 SP.
This assumes $20m stay-in-business capex (hopefully overstated as they consolidate with Contract Power) and no change in working capital.