So where too now?, page-12

@carbon1 I love your retrospective “rose coloured glasses” view. Before Basham took XTE over it was a basket case. It had made $100k, $200k, and $300k (all accounting profits!) in the 3 full years before it the made a $4m loss on $27.4m turnover. Basham came in and cleaned house in his first 6 months which saw the H1FY22 be a loss of $6.8m. And included in that was the Virolens “magic” COVID machine that the Board and Philippe Odouard the then CEO for all of those 4 years prior (remember him!). He cut away waste and a heap of inefficiency, annd sacked an heap of useless sakes people and got the business focused on revenue generating activities. Yes the Ukraine deal was good and helpful ($47m across 2 FYs) but it was certainly not the only basis of growth under Basham.
The H1FY24 guidance includes a lot of inventory write offs from the US business which is now 3x what it was under Philippe. But I wouldn’t be surprised either if the was still some hangover crap being thrown out with this result like the UGV mini tank Themis (that went nowhere- again which was bought by Philippe) and their software which was being touted for years before Basham came along. If you read the various investor decks over the last year or so you can see the clear move away from both of these “lemons”. What’s 5-6 years of software development worth on the books? $1m+? As for the armour stock, that seems silly to write off. As someone said on a thread here “it’s not like is milk that goes off”! Surely the US armour sales team could sell this gear for years to come. Seems like the Board just wants to clear house and don’t care about the SP being run right down again.
My prediction is a US competitor or Private Equity firm will swoop in and pick it up for a song. No doubt that the armour business has not delivered over the last 6months but this is still only the half year Board in the end. Pity. Great little business with so much global potential.