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OTOC Limited Eyes Surveying Acquisition, Cash Balance Swells

Jan. 21, 2014 7:56 PM ET
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Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London. Proactiveinvestors operates five financial websites in four languages providing breaking news, comment and analysis on hundreds of listed companies across the globe daily. We are one of the fastest growing financial media portals in the world. The group also operates hugely successful “investor forums” where three or four companies present to an audience of high net sophisticated investors, fund managers, hedge funds, private client brokers and analysts. Ian Mclelland founded Proactiveinvestors in 2006 as a way to channel his own views on companies small and mid-cap public companies. What started as a hobby quickly turned into a full time job as the website's readership exploded. One2One forums were added later in 2006, and within two years the company had expanded its operations into Canada and Australia. In 2009 the company expanded into Germany and finally into the US in 2010. Proactiveinvestors is now one of the fastest growing global financial media organizations in the world receiving more than one million visitors per month, with investor forums held across the globe on a regular basis.

OTOC Limited's (ASX: OTC) shares are expected to lift today after outlining a strengthening balance sheet with increased cash reserves, which places the company in a position to make acquisitions.

The company's acquisition strategy targets businesses with established revenue streams, which then also provides diversification to the group's earnings.

OTOC's unaudited cash position for the 31st December 2013 was $9.0 million, up from $6.2 million at 30 September 2013 - with the enhanced balance sheet a result of continued strong cash flow from operations.

Adding further to the available cash is a $8.2 million finance facility with the Commonwealth Bank of Australia (ASX: CBA).

The resources and infrastructure services provider has a proven track record of achieving consecutive periods of positive operating cash flow and therefore received a waiver from ASX for the lodgement of quarterly cash flow reports.

OTOC's audited results for the half-year ended 31 December 2013 are expected to be released in February 2014.

The company has a blue-chip client based including Rio Tinto (ASX: RIO), BHP Billiton (ASX: BHP) and Fortescue Metals Group (ASX: FMG).

Perpetual's a substantial shareholder

Perpetual Limited (ASX: PPT) became a substantial shareholder in November 2013, and holds around 9.7 million shares, or a voting power of 5.02%.

Whelans Surveying eyes acquisitions

The company said that Whelans continues to present organic and external growth opportunities with geographical expansion being a priority.

Currently property development and government infrastructure continue to generate strong demand for surveying.

Shareholder loans reduced

OTOC's shareholder loans have also been reduced to $0.46 million by the end of 2013.


OTOC has out-grown quarterly reporting given ongoing strong cash flows and it had $9.0 million cash at 31 December 2013. A recent CBA finance facility of $8.2 million should enable the company to embark on larger projects in core markets, providing a strong platform for earnings growth given OTOC is eyeing surveying expansion for Whelans - either organically or by acquisition.

With a market cap of circa $19 million (share price of $0.12) and based on financial metrics and financing facilities and an acquisitive strategy to boost cash flows, Proactive Investors has estimated a share price target of $0.17 - $0.22 within 6-9 months.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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