Mencast: +1.0% at $0.510 after it says legal proceedings involving its wholly-owned subsidiary, Mencast Marine, have ceased without significant financial impact on the group. UOBK reckons the settlement amount will be miniscule, not exceeding $300k, or 1.8% of projected FY12 net profit of $16.2m. Expects the actual net profit impact to be even more muted, with the amount likely to be capitalised and expensed over a no. of yrs.
Adds the positive devt represents an excellent buying opportunity, putting to rest any uncertainties surrounding the legal case over the past year. House adjusts its forecasts slightly to reflect the payment of the settlement in 2H11, keeping its FY11 and FY12 EPS forecasts of 5.8 cts and 7.7 cts intact. Reiterates Buy recommendation and $0.59 TP.
Says Mencast is still trading at a very attractive FY12F P/E of 6.6X.
Mencast is a marine equipment and services provider specialising in sterngear equipment and services.
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