Ann: Konekt announces 70% increase in net profit after tax-KKT.AX, page-8

Solid result, no question.

I like the fact that management are fairly circumspect and continue to chart a course of building on their strengths. It seems the strategy to build scale is paying off, costs are rising more slowly than revenue. I'd like to see the net income margin edge up even further to levels that the very best companies have, 10% +.

Just going by the company's figures of the size of the primary/secondary intervention market of $700m, KKT with only 1% market share stand a fair chance (with their recent acquisitions in this market) of clawing in substantially more revenue.

Main risk I can see comes from customer concentration, with 43% of revenue coming from the two largest clients. The acquisitions should help dilute this somewhat.

Also, it looks like we'll see the use of debt to fund any more acquisitions with deferred consideration sitting at $3.8m and underlying annual free cashflow of about $3m based on FY2016 results.