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Author thirty fifty twenty     View Profile     Add to favourites     Ignore
Date posted 2013-09-19 08:20
Subject analysis of interims at 28p 
Opinion Weak BUY
Votes for this Posting Voted UP 2 times.
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i think a decent set of interims.

in previous post I felt confidence had been shaken in the company so it will take a couple of years for that to truly recover and get the business on an average rating.

that said there seems to be an air of understatement in the results
they do talk frankly about their problems which is very refreshing
and they do talk confidently about issues having been resolved
debt has reduced AGAIN so confirmation that the business is producing CASH and growing
and they are returning to the divi list with initial yield maybe 3% (say 0.75 total)

so there are positive signs but I think will be a time before market -regains trust

they expect H2 to be the same as LY so that gives ebitda of 6m+ for the year
and debt maybe 10m
so they have produced for a few years free POST TAX cash flow of c.2.5m
so even on a POST TAX return of 10% p.a. that implies 25m = c.30p
taking a more reasonable 8% p.a. POST TAX return = 37.5p

that equates to about 6.5t EBITDA which is low
and a P/E ratio of 6t

so no surprise that the price has recovered from the lows of 23p
on large volume and director buys

for me I think reasonable value is c.37.5p
but can see a more positive scenario that they do a good acquisition
and market then sees the new mgt growth record albeit with a hiccup


All IMHO, DYOR + BoL
TMMG is in my portfolio
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