Ann: Profit Guidance, page-4

"What makes you think work is currently being awarded? I can't find anything in the recent announcement. Not being picking just wondering if there is a source/announcement I've missed?"

@Just_a_guy ,

The "Profit Guidance" announcement of 29 June states, "Previous guidance was that Korvest was due to return to profitability in this half due to a number of domestic infrastructure projects that were expected to commence supply in the second half of FY2017. The supply of these projects has only recently commenced and will continue into FY2018."

I interpret that as "We had been given the orders at the start of the half, and we commenced fabrication, but they kept us on hold for a few weeks because the construction sites weren't quite ready to take delivery until late in the half."

Of course, they might be outright lying, but I doubt it.

And then there's also this that followed the above, "We expect a number of similar infrastructure projects to be delivered into FY2018", although it is far less definitive than the preceding sentence.


"Also when you mention the cycle kov is subject to, do you mean mining or building or civil engineering? Are we at/near the bottom of whichever cycle in you opinion?"

Korvest is exposed to all of those cycles. Any industrial or commercial structure that requires walkways or cable trays, KOV is essentially the only player in Australia that can custom supply to spec.

As to whether we are at/near the bottom of any of these cycles, I don't really know, because business cycles are almost impossible to predict, I think.

All I know for sure is what I am able to observe, and what I observe is a company valued at $25m that sometimes makes in excess of $10m in EBITDA and is now making zero EBITDA, and that most times makes somewhere between zero and $10m.

My investment in Korvest is not predicated, necessarily, on them making $10m EBITDA again sometime in the next few years, but somewhere between zero and $10m.

I'm not sure of the exact point in time that will happen, but - unless the business cycle is dead - I am 100% sure it will happen.

And while I wait for it to happen, I get paid at a rate that is several multiples of what I would get paid for having my money sitting in the bank (although I fully expect the payment I get in relation to the 6 months to June 2017 will be somewhat reduced).