(MENAFN- ProactiveInvestors - N.America) 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 shareholde
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 acquisition
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 reduce
OTOC's shareholder loans have also been reduced to $0.46 million by the end of 2013
Analysi
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
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