Tom winnifrith: So what are the financials in terms of forecasts. The company has costs which are pretty much fixed - they will be c £5 million in calendar 2017. Next year- assuming that the number of big contracts is c6 by the end of 2017 rising to 10 twelve months later, I'd look for £6 million. So there will be a material loss this time but by calendar 2018 sales should be at least £8 million and pre-tax (and post tax) profits £2 million. In 2019 operational gearing really kicks in and so I look for sales of £12-14 million and pre-tax profits of £5-7 million.
A growth story like this should surely be on at least 10 times earnings but arguably 15 would be more appropriate. On a 2019 20% tax charge ( it will not be that high) that implies a valuation of £40 million to £84 million. Now I accept that is a wide range but at 20.125p the market cap is £13 million. Even at the bottom end of the range we get to a share price of 60p+ as we head into the second half of 2018 with real earnings visibility. At the top end of the range you are looking at a share price of 128p.

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