Ann: Cardno Provides Market Update and FY16 Guidance, page-152

I think PPI is the tip of the iceberg, there is a long litany of acquisition failure, seems it was done on good luck rather than proper due diligence. Remember the board does governance and management executes the strategy. I think the management team has got away with limited blame here, like sacking a football manager when the team is not performing.

I'm not concerned about legal action (because a contractor has lost money on a job), that's common practice in this industry. Especially if you operate in the UK! That's why they have Professional Indemnity Insurance.

What we have here is a company that acquired companies at the height of the boom and paid too much, failed to integrate the acquisitions and at the same time failed to modernize its operations. Their move to offshore delivery platforms is 15 years behind industry best practice and they are a long way behind on their engineering platforms.

Remarkably they still make an operating profit (forget the book value right downs), which is why I think they are fantastic value at present. If they get their integration right and implement the strategic review (focused on key geographies in the US, Asia and Australia) and shift about 25% to 30% of their workforce to the offshore centres then this could be a massive turn around. Wankmuller seems to have the right plan, but the sins of the past have to be exorcised and time is of the essence. The longer they take, the further cash flow pressure limits their options.

Don't get me started on the $1 float price.