ZakLeo The reason why I did not update my analysis is because...

ZakLeo

The reason why I did not update my analysis is because the trading metrics for the 6 months ending 31 December 2023 that I expected to use as grist for the mill were a disaster. Consequently, I had nothing to extrapolate. Also, WAK gave little overt information to explain the seriousness of what happened.

The huge order for the K99F product that Stanco placed in February 2023 that Management thought it could meet, transpired to be a problem. The K99 plant could not produce the particle-size distribution (PSD) specified. Stanco is a distributor, and it buys what end users specify, so it is not Stanco that changed its mind in respect to the PSD.

The K99 plant is, I think, an integrated grinding and classification airflow unit. An air-classifying mill grinds and classifies materials by utilizing airflow. WAK had to order a secondary classifier to deliver the specified PSD. The secondary classifier is now installed, but it is going to require more processing to produce fine-grained K99F, and the price that WAK gave Stanco in February 2023 would not have been based on that extra processing. We have not been told if that is an expensive exposure that WAK must wear. Also, I am unsure if end users are prepared to pay a higher price in future.

On non-K99F products, the quantum of product that WAK sold and delivered in Q2FY24 must have been small, either because orders were low, or hassles with the plant disallowed delivery. What we can expect for other products, especially in respect to K99C (for pressure-cast ceramics) has no history as a basis for extrapolation.

In summary, there is too much that I do not know to finalise my analysis with supporting facts. I could write a rosy story that suits my Micawberish conviction, but investors have had their fill of that sort of opinion, so I'll wait for more facts to emerge.