Ann: Half Year Market Update, page-10

I think the report reads poorly.

The company needs some management that are focused and a Board that is not comatosed. After the release of the annual report I questioned what was the strategy, migration to one platform was a key plank of the strategy (while you look at simplifying the back office you also need to understand how you propose the grow revenue). Well they are struggling on that front, who is accountable? Do they have a project manager that drives the implementation? How do you let trade debtors expand so much?

I now need to add lack of proper due diligence to my concerns, how else do you explain the disappearing revenue (2 employees and the former owner run off with 2 key clients). Revenue growth and margin expansion has stalled, now we need another review to ascertain "what can be sensibly achieved" without running down the business. Wow, i would have thought that might have been front and centre when they announced a cost out program of $8m. Now they have achieved cost out of $2m (not explained how this was achieved, but shareholders are hit with a "one off" restructuring cost of $3m).

I think the major shareholders should be reviewing the composition of the board and the merits of these individuals.

New management, need to give them some time, but I do think they need to articulate a strategy and how they are going to implement the strategy. the results briefing might be a good time to start.

If that can't be done then they should engage a merchant bank to create a data room for potential investors.