Some points of interest are:
- No mention of the orders with Vodafone. I will assume that the Vodafone orders have been insignificant and will be for FY14/15.
- Gross margin dropping from ~33% to ~30%.
- FY14/15 guidance was not provided. I doubt it was “too early”, I think it was “too ugly”. NTC provided the FY13/14 guidance on 26-Aug-13 so why can’t they provide guidance on FY14/15? Given NTC are not obliged to provide guidance, we can assume no news is bad news.
- Some of the opportunities in the presentation have been around for many years, i.e. the Verizon smart metering trial in the US has been going on for years.
At this point, NTC HAVE to win 1 or 2 big contracts to justify the share price. Even if a contract is won very soon, I feel it might be too late to avoid NTC posting a loss in FY14/15. NTC will have to find an extra $14M in revenue in FY14/15 to offset the FY13/14 smart meter revenue. I think the NBN project will contribute a maximum of $5M of the $14M which still leaves $9M to come from somewhere…and this is just to get the same result as FY13/14.
I am still a holder and a believer in NTC’s opportunities and any significant contract win will re-rate the company. Until then, I am of the belief that is likely to post losses until a significant contract is won.
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