Ann: Cardno Provides Market Update and FY16 Guidance, page-2

A very ugly picture. Earnings have continued to materially erode from $63m in 1H15 (to 31 Dec 2014), to $45m in 2H15 (to 30 Jun 15) and now an appalling $23m-$25m in 1H16 (add-back $2m for defence costs and maybe $1.5m for ATC). Not sure how the Board backed their former defence statement and did not fully support the revised Crescent bid (potential class action?). The poor result is attributable to the US but much worse than I expected. Reviewing past investor presentations and annual reports, I can't quite understand the reasons cited of Oil and Gas (as this was already generating much less than expected in the June results), Mining (it only accounts for 1% of the US business and must have been hurting for more than a year) and Latin America (they wrote this business off for sale earlier this year). Given the AUD devaluation to the USD they should be making more money in a good economy - this is the reason I kept the stock. It appears to be mostly a cost issue which is in the hands of management - does anyone have a different view? Now they are bringing the bloke who has run the US for years to run Australia Pacific - will be interesting to see the impact he makes - but hopefully the CEO will put a much stronger leader in his place in the US. Any views on the share price for the capital raise?