Ann: Trading Halt, page-357

I thought an obvious response to my post would be your reference to the infamous Foundations for 2016 document, Cracker. In fact I think the word ‘secured’ that you cite is less important than inclusion of the word ‘earnings’ in that release. It is this announcement that I believe primarily tainted the credibility of other announcements and continues to have a lasting effect.

The ASX releases during 2015-16 have the appearance of being constructed to be equivocal by someone genuinely enthusiastic but numerically challenged. Their effect contrasts with a common complaint found on many other HC sub-forums - that management is not putting enough effort into releasing sufficient positive announcements to boost the share price.

I believe there were two primary errors made with the Foundations document.

(1) It should have referred to CY2016 targeted Sales orders recorded rather than Earnings or Revenues; but in any case
(2) It should have been retained solely as an internal budgeting wish list rather than be released as an ASX announcement to the investing public. The breakdown between the different market components had changed significantly from the original by the time of the AGM presentation at the end of the year.

Its release obviously was a major mistake since it has distorted investors’ perceptions of the veracity of subsequent announcements and has pressured the share price as a consequence.

I have posted a few times my belief that the value of Sales orders booked during CY2016 probably would have been close to the targeted US$18M amount given in Foundations, and it was Sales rather than Revenue that management kept referring to throughout that year. That simple distinction likely would have avoided much of the angst, but that idea didn’t seem to fit well with the prevailing group need for blame.

Still, at some point the doubters will simply need to get over it.