half year results, page-7

Aksier

"The financial results didn't meet the independent valuers forecasts" your kidding me, the IE receives and comments upon managements forecasts, thus management did not hit their forecasts. There was even a statement from the MD in the earnings release admitting that they fell short and would fall short for the year.

What is interesting is to compare the market update provided by the company on 14 July - really upbeat going gangbusters for 5 months to May revenue of $9.8m and EBITDA $2.77m, with that of the 6 months to June results just released, downbeat revenue $11.0m EBITDA $1.8m.

Hmmmm! So that means that by taking the May results away from the June results we get the performance for the month of June. OK so how does it look
revenue of $1.2m and EBITDA loss of $1m - not so good. Then ask yourself the question why were they that upbeat in the release on 14 July, did they have no idea how bad it was travelling? Also note they have an $8m order book, given they did $9.8m for the 5 months to May, this only represents some 4 months (or 7 months if you use the month of June run rate!), in an environment that they now admit is soft. They normalised the June result for the $700k costs, but are silent re these costs in the May result. Likewise the July commentry spoke highly of Hire Access' year on year increases in profitablility, but in the June financials they have amortised $800k of hire access intangibles?

Don't be surprised if they need to raise capital shortly, which will be at the absolute worst time for them.

Company's need to earn the market's trust, they have not only fallen short on promise, but given the July announcement they appear to have been some time before they fessed up, or worst still had no idea. In the market's eyes ,these early stumbles on guidance / forecasts, take many reporting cycles to recover from.

Aksier, you appear to be really bullish on this and its management, make sure that you don't / haven't crossed that fatefull line of Faith becoming Blind Faith, i have before and trust me you only do it once!