It's a blow no doubt about it. But contract losses were already priced into SP. The stock is now trading at close to 2 x FY19 EBITDA. Contract loss will be in the region of ~ $1m FY20 EBITDA - so will still well and truly be generating positive cash flows after the $4m debt principle paydown.
This will be an unpopular view, but I think there are a lot of reasons to suspect the share register are absolutely sour with this company, and the underlying fundamentals are being way overlooked. Management are not idiots, and they have a lot riding on the success of this business.
KKT Price at posting:
24.0¢ Sentiment: None Disclosure: Held
