Ann: VMX Appendix 4E and Financial Report, page-11

Agreed. Removing the $2.613 m abnormal item means they made a small loss for the half year as net profit before tax was $2.177 m in the second half. Operating cash was negative $2.919 m in the second half no doubt reflecting the lack of revenue from John Holland.

While there is no provision in the accounts for bad debts they do say on page 7 an additional cost provision was made during the year to a current road infrastructure project. I assume this is Northlink which is in dispute with John Holland. Exactly where this cost provision appears in the accounts is unclear to me.

I have a different take on this. Assuming the costs incurred on the disputed contract have been taken into account, the company has already taken the hit of not being paid in the net cash flow over the last year. If the company is right that revenue will grow, margins improve and overheads will be constant in dollar terms then it will be very profitable in the current year. I note however that as shares on issue have jumped from the 101 million weighted this year to 124.6 m at the end of the year earnings will have to leap to give a reasonable EPS to justify the share price.

Shareholders need better disclosure and a presentation would help. This is still run like a private company to me with minimal (timely) disclosure as the last year illustrates.