Comsec Tech New Target $4.45, page-83

Even though I remain invested in NEA and am looking to buy on current weakness, I have learnt through many years of investing for my SMSF in its retirement stage the importance of trying to identify any negatives as well as any positives. It has been my natural optimistic bent that has led me to disappointments in the past.

From the last announcement on ACV trends, I have updated my spreadsheet of ACV and incremental ACV on a half yearly basis, as this gives me the best picture on how growth is really going. I would like to share the following findings from this work:

Group Incremental ACV:

• This has been very steady for the last three quarters at between $11.9M and $12.1M in AUD at a time when I would have expected this to be increasing.
• Prior to this, it was also reasonably steady but at a much lower level for the previous four quarters, fluctuating between $4.8M and $7.2M.
• So, there was a very big step up in incremental ACV in the 18H2 quarter from $7.2M to $12M, with no further step up in the last two quarters.

I find this stalling in incremental ACV as surprising given the steady growth in sales staff, the new products launched over this period and the expansion into New Zealand and Canada. However, I remain a believer in their future, and expect that, over FY20 we will again see a step up in incremental ACV, just as we saw happen in 18H2.

Please do not misinterpret my post as a downramp. I am simply sharing these observations so that investors have the negatives with the positives.