The net revenue that FBR ends up with really is anyone's guess...

The net revenue that FBR ends up with really is anyone's guess at this stage. Basing the figure as a percentage on the sales price of the machine is a reasonable estimate, but we would need to know the sales price of the machine in the first place. FBR have previously provided guidance of $2m (Prior to investigation), but this could be significantly altered after the report from EY-Parthenon is made available to FBR. You may recall the State One Stockbroking report prepared by David Brennan a Chartered Financial Analyst (CFA) who estimated the sales price of $5m. If this were to be the actual sales price per unit, then 10% of the sales price would equate to $500k per the model above. For those that would care to read a CFA's analysis of FBR the link below may be of some use.

https://www.stateone.com.au/Downloa..._initiation_New.pdf&downloadType=PUBLICATIONS

Assuming Mike's previous comments that FBR are looking at the multitude of ways FBR can generate revenue streams, a 10% net profit return on the sales price is more than achievable. The model estimates that for a sales price of $2m(FBR), $3.5m(Average of FBR and Stockbroking One), or $5m (Stockbroking One), that based on 1,000 units per year and a P/E ratio of 15, the share price would be calculated at $2.76, $4.84, or $6.91 respectively.

Of course the actual numbers of units produced, and the time period in which this could be achieved will all come down to the manufacturing agreement FBR will eventually strike. All I'm saying is that when you start playing around with actual margins vs units produced, vs P/E analysis, FBR starts to look incredibly attractive at the moment given the current price if you are considering an investment in FBR as a long term hold.

It's not without it's risks, and I think Hokey and many others have been prudent in outlining their concerns, not only associated with FBR, but the market in general. Personally I think we are heading for an extremely volatile time in the market, and caution is advisable. That being said, FBR seems to be a company that is on top of its game and is about to change the construction industry as we know it, but I wouldn't bet the farm on it just yet, it's a long way from producing 1,000 units, and it's a stock that is probably more suited to those with long investment time frames.

Hopefully the above is food for thought, and I'd be interested to know who has actually replicated the model and made their own assumptions from it. If you would like to share some of your assumptions I'd be more than appreciative.