Potential For Takeover??, page-8

Having a "number of good contracts" is not sufficient for a takeover, in my opinion. The entire order book - 100% of it- has to be rock solid and properly costed. There is no certainty here of that and that is the reason why contractors generally go bust every 5-7 years. Look at FGE, MAH, Henry Walker Eltin, LEI, and today UGL. The corporate graveyard is full of busted contractors and for good reason.

As I pointed out earlier, less than 5% of WDS' contracts totalling $330m have to fail and WDS could go broke. Ironically, new management could come in but mis priced contracts negotiated by Terry Chapman could still bring the company down, even when he's sailed off into the sunset. In other words: how much do you trust Chapman's skills and abilities? That is the only question you have to ask yourself. Because that is precisely what you are betting on. I would be very, very cautious about touching WDS. Rarely is the first profit warning the last.