6.3 million npat forecast for the full year, page-2

Ragingboom, I note you are quite excited about this company and wonder if you have looked back through its history at all?

Firstly, I think you can ignore the $5m of profit from discontinued operations. It has been apparent for several years that they would eventually get to remove these liabilities from the balance sheet and therefore would be able to report a non-cash profit. If you look back through history, you will find these "profits" come by writing off the liabilities of a company, "Alpha Aviation", that has been in liquidation for several years.

The purchase of Alpha Aviation seems to me to have been a disgrace. $11m was paid for this loss-making business in July 2007, and it appears from the explanatory notes in the notice of meeting to approve the transaction that four of the directors of Inventis (then Gregory) were also shareholders in Alpha Aviation. In under 6 months, the business was placed in liquidation. The factors leading to its liquidation appear to have existed prior to the purchase, yet directors glossed over them.

Then we had the 2011 "Aschmoun" debacle - the very strange buyer that wanted the technology division for $US23m but never could get the money in a saga that the market was clearly (and correctly) never convinced was for real. This dragged out for some time, during which directors continued to provide idiotic reassurances and look like fools.

While it would be great if the company actually managed to make the forecast $1.3m from continuing operations, the MD has a long history of predicting profits that fail to eventuate for one reason or other. The furniture business appears to run at low margins and the Technology division has had patchy performance, with volatile revenues - it was making around $6m in sales in 2009 and 2010 interim reports, so it can hardly be said to be growing.

Maybe, just maybe, they will finally manage a profitable result and a few buyers will be convinced to push the price up. But I cannot imagine this company ever being more than a dangerous trash trade.