I have also liquidated my position today. The FY17 earnings...

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ZMan

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03/08/17

20:32

Post #: 26277834
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Originally posted by Mpacman ↑

Too many red flags that make me feel uneasy with the recent announcements.
1. Only a few months back management was forecasting revenue growth in the higher end at 15% but it now turns out to be at the lower end.
2. Management keeps emphasising organic growth on presentations even when there is none if you compare same periods after past acquisitions are fully intergrated. In fact the numbers tell me there is about a 2% negative growth.
2. They only provide 2018 forecast of The Works with no historical financials. They definitely would not be paying a multiple of 8 if it was generating positive growth.
3. Potential for future margin compression.
4. Integration risk of The Works. I no longer give management the benefit of the doubt.

While there is good upside if all goes well, I have recently de-risked my position so that I can sleep better at night.

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I have also liquidated my position today.
The FY17 earnings guidance is a downgrade on what they presented at the half year results. It is inline with their original guidance, and the guidance at the latest investor presentations. I couldnt find where I saw their latest investor presentation, maybe from a presentation I saw on a HC post. Poor investor relations hiding that guidance update from the official asx announcements.
The latest acquisition has some extra risks, imo, being an area outside their expertise and with plenty of competition.

RXP Price at posting: 91.0¢ Sentiment: None Disclosure: Not Held
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I have also liquidated my position today. The FY17 earnings...

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