My analysis of PIT's value

Recent interims showed pre-tax of £403k. Annualised, this is £806k, or £564k after 30% tax.

This is also after interest of c.£300k (£210 post-tax) - the debt should be paid down within 2-3 years as depreciation exceeds capex by more than £1.5m per annum.

So, without any growth, we have post-tax of £564k+£210k=£774k. Then you must add the cost savings from the redundancy of staff whose pay was included in the interims - this is around £300,000 per annum, or another £210k after-tax. So I am now looking at pro-forma post-tax of £774k+210k=£984k, i.e. £1 MILLION.

Further growth seems likely, based on the recent improvements in Quiligotti and a devaluation of the pound, which is (IMHO) a certainty bearing in mind the growing trade deficit - this should enhance competitiveness.

I also believe that the balance sheet, with its £13m tangible net assets, is capable of releasing lots of cash, perhaps £5m.

A prudent view might therefore be that the company is worth (10x£1million)+£5million = £15 million. This is barely above net asset value, so I consider this conservative. This would equate to a share price of 8p, or a gain of 130%.

So, for me, I have great hopes for my PIT shares. Not only have all the skeletons been cleared out in the last year or so (e.g. old contract debtors), this business represents a fantastic VC buying opportunity because of its excellent cash flows.

Interested to hear others' views on "my little secret"!