Ann: AFL Entitlement Offer Results, page-3

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vagabond84

993 Posts.

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26/03/24

22:44

Post #: 73072850
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Originally posted by neoteric: ↑

Probably not a bad result for existing shareholders (not the maximum dilution if you did not participate) considering this acquisition really came as a surprise so early on in the term of new management. Personally I couldn't contribute more capital to the company until I have seen reasonable evidence that the management is competent and the business (ex Withnalls) can earn an acceptable return on the capital in the respective businesses. That's still inconclusive in my mind.
So we now have an extra 16% shares on issue and over $2m of debt to fund the initial outlay for the acquisition. Pleasingly the CEO is more aligned now with a modest stake in the company, and overall the company seems to be more focused on sustained performance and profitability.
Only $550,000 equity has been raised over and above the needs for the initial transaction payment so hopefully nothing dumb will be done with this sum and over a period of time we can see if the integration and the thesis for the acquisition plays out as hoped.

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I did not participate either. Need to see evidence that they can turn into a sustainably profitable business before I commit further capital. Given the raise is at 15c versus my original entry point of 42c, I'm obviously not thrilled, as it makes breakeven that much further away.

AFL Price at posting: 16.0¢ Sentiment: Hold Disclosure: Held
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