|
PSV is a group whose share price is currently trading under the potential acquisition of 60% of its shares at 0.0556259 Pounds Sterling a share. At the current ZAR/UK Pound rate (13.2144) this translates as around 73c per share. In other words, at PSV's current share price of around 48c, there still exists a risk arbitrage opportunity of around 52%. Given the above scenario, yesterday PSV released a trading update showing how EPS are expected to drop by 45% to 55% as compared to the prior period. The reason for this is "...income in the form of negative goodwill which was recognised during the year ended 29 February 2008 not repeated in the year ended 28 February 2009." While EPS are important, it is perhaps more important to reflect on the fact that PSV expects its HEPS to be only between 5% and 15% down on the prior period. In the worst case scenario (always a good scenario to look at!) this translates into HEPS of 6.76c. At the current market price this implies a PE of 7.1...not too bad considering PSV's prospects, the acquisition deal on the table, and the general market conditions for all businesses. Buy the PSV Research Report here!
|
