Ann: Full Year Results Presentation, page-9

The good:

- Massive improvement on cash collection and management in the second half. Profitable businesses which can't manage cash still die, so hopefully they keep the focus on this when moving forward. Positive operating cash in the 2H even excluding JobKeeper and tax refunds is a huge win during COVID.
- Actually managed to nearly match last year's revenue, despite COVID. This doesn't look to include JobKeeper either which was netted off against employee expenses.
- Cost out seems to be progressing and they are realising synergies with shared services. Certainly hope so, if they didn't have central finance, HR & IS&T teams previously then it was an absolute failure of previous management.

The bad:

- Debt remains stubbornly high. They seem happy about it based on their gearing against company capital, but the companies capital is based on intangible goodwill. Not coming down any time soon with repayments deferred to Dec-21, hopefully will not grow though and the business will.
- $15m of earn-out listed in current liabilities means it is due this financial year. I hope it isn't until closer to next June because that is a significant chunk of the cash balance.

Unsure:

- Dividends being back on the agenda. Would probably prefer that money go towards debt repayments to shore up the balance sheet, but don't care a huge amount provided they are back in the profit.
- No update on the court case they had going over in WA against one of the prior owners of a business they bought out (if I remember correctly)?

Hopes & Dreams for FY21:

- Positive NPAT, positive cashflow (overall not just operating and without raising capital), revenue growth and gross margins back to prior year 40%

Overall an OK result for a new management team taking over a cluster during a cluster. Didn't knock it out of the park, but definitely not a bad result in my opinion. Upgrading sentiment to a buy, but feel the risk is very high with those debt levels.