When to Catch a Falling Knife, page-11

OK - found my scraps of paper ...

If I take mid-point of profit guidance for FY18 ...
- 2H vs 1H FY18 - revenue down ~$1.4m, NPAT up ~$0.5m
- 2H18 vs 2H17 - revenue down ~$2.6m, NPAT down ~$1.0m

On this guidance, YOY revenue has gone backwards vs previous half and previous corresponding half. Previous half was good (but not extraordinary) considering past growth. So if I wanted to tell an OK news story, I'd avoid these comparisons and state the 'flat revenue' and 1-5% profit growth (as they did in the update). But ...

Revenue flattening/falling is a signal of a business maturing. I appreciate that they're wringing more profit out of the revenue (again a sign of a mature business) ... but a mature business doesn't trade on 20+ PE's (at today's reduced selling price). So, it's clear why the price fell. Without the statement about revenue growing in FY19, I think it would have fallen a lot more. But I'm now reading a bit more between the lines of the revenue fall (thanks as previously to Michael's post).

... but still skeptical and highly miffed about who knew what during the decline from $4 to $3 prior to the announcement!