PBP announces upbeat FY08 profit guidance

Probiotec (PBP) announced today that it expects FY08 profit before tax growth of at least 30%. The market reacted to the news favourably sending the stock $0.09 higher to close at $1.30.

The forecast is not surprising since PBP has already indicated that they expect PBT of $6m for FY07 (pre the Phoscal litigation claim). Since PBP recorded PBT of $2.1m for 1H07 that means they expect 2H07 PBT of $3.9m. If we estimate FY08 PBT by simply doubling 2H07 we get $7.8m which wouldn't you know it is 30% higher than FY07.

That is of course assuming no growth after the second half of this year. Granted the recent debt funded acquisition will increase the company's interest expense. Even so given a full year impact of the recent acquisition and organic growth in the company's own branded products (as outlined in today's announcement) you would have be disappointed if the company didn't do better than 30%+ growth in pre-tax profit in FY08.