Accumulation?, page-21

actually no. i hope i'm wrong.... am waiting...still waiting...have been waiting since the 90's... have been waiting soooo long and got in sooo hard that selling now doesnt really matter so still i wait.....

i think if i look more closely at the last set of financials, i'd find that the "profit" reported was kinda false and was predominantly due to the "contract settlement" on one of their jobs carried out last financial year. therefore that "profit" was delayed and only booked FY2014 when the "dispute" was settled. operationally, OEC looks to have lost money FY2014.

lucky they got the cash back too as they needed it to pay for the share buy-back otherwise the buy-back would have eaten into cash-reserves.

am not saying that there was collusion with a third-party in shifting the financials but a similar scenario happened years ago when the building the HQ resides in was sold. in that case, the deal was internal and when it occurred, bonuses were awarded to top-management who IMO had no involvement in the purchase of the building in the first place all those years back (different mob). when the building was sold, a profit was booked and it was "deemed" that management did a great job and were thus deserving of a "performance bonus." during this time when all this occurred, i had a feeling that the financials for the following year was not going to be good. lo and behold come the end of the next financial year, results were pretty rubbish and guess what happened... there is an announcement that management had magnanimously refused to accept the "bonus" given the year before so the "cash" got booked back in and the financials looked a little better.

it all seemed kinda "naughty"... then again, i would probably have done the same to keep the company going if i were in charge.

LPG business seems to just be chugging along lethargically. i've always wondered years back why OEC never got into the LPG business sooner. they had the CNG injector developed for the indian market years before and it probably wouldnt have taken much more work to adapt it for LPG. OEC only got into the market just when the govt subsidies for LPG installation started. when OEC Autogas was all ready, up and running... subsidies were in the process of being cut back and soon LPG started getting taxed dampening interest further in conversions. a classic case of "johnny come lately."

AFAIK, OEC doesnt own the major LPG equipment components. most of them have been licensed from Continental. the system isnt even Direct-Injection capable which is OEC's strength and thus far there hasnt been any more mumblings about wide-scale development of such a system for commercial sale. the work done for Toll Holdings in conversion and testing of a number of their trucks to run LPG/CNG may/may not be DI. OEC's major contribution through Autogas seems to be tuning-refining-optimising the assembled LPG system to suit the Oz market. falling AUD is not good news for Autogas.

the Ford EcoLPi isnt Direct-Injection either. that product also took way too long to get to market. probably cant blame OEC completely for that as Ford also was involved.

besides selling the HQ, share in Synerject had to be whittled down over the years to just to keep the parent company OEC alive.

the Changan project offered hope of a major eventual chinese deal but that turned out to only be a research/learning exercise by the chinese.

assuming we forget all that was in the past... what do we have now....

essentially the UAV market. that component seems most prospective going forward.
HOWEVER! management always like to quote prospective market size quoting markets in the hundreds of millions or even billions. as far as i'm concerned, that all BS unless the company is successful in securing a major chunk of it for themselves. going back to what i said before about funny Terry's performance is not tied to sales-revenue or even heaven forbid "profit"....
that act alone indicates to me that there is no certain confidence that those particular indicators would be achieved.

there were faint mutterings that there's eventually going to be a UAV related production facility in the US. i suspect OEC wont own the facility. i hope OEC dont end up having to pony up huge amounts of cash to set up such a facility. OEC wont be able to raise the needed cash easily and certainly not without massive share dilution pretty much undoing the previous 1 for 10 consolidation. when the consolidation was first announced, the first worry that came to mind was that there would be an eventual re-dilution to raise funds at some stage.

history hasnt been kind. OEC had to spend millions on their Sydney facility to support the EcoLPi which seems to have turned out to be a dud commercially despite rave reviews in the media about the tech and implementation. ROI on this venture has been nothing to rave about.

so... OEC doesnt build or own the US facility... this means that OEC will probably end up getting a once off licensing payment followed by a royalty stream. how big has OEC's royalty stream for all their deals been over the years? a few hundred thousand per annum... possibly a few million.... remember, OEC's contribution to the whole UAV device is only a very small component of the whole so OEC will probably get a few $ per unit. from memory, OEC gets ~$US30 for each Mercury outboard - the highest per unit payment of the entire product portfolio; certainly not hundreds or thousands of dollars for each unit.

all UAVs OEC are involved with would be military based. civilian UAV market i suspect is predominantly electric motor based. furthermore, mass access to the civillian market will be years off as governments work through licensing and safety issues concerning operating such devices in public/commercial airspace.

so... a few dollars for each unit... how many will actually be produced???? imagine how many needs to be sold in order to generate royalties of a few milllion. if this milestone does get reached, the time of the "attack or the drones" ala "Terminator" would certainly finally be upon us.

there are just waaay better prospects and opportunities elsewhere!

having said that, the sell side is pretty thin to almost be non-existent so determined buyers certainly would have to pony up serious cash to entice sellers onto the market.IMHO that's exactly what has been happening recently.

question is... would the SP needed to entice more and more sellers to show themselves justify the valuation of OEC at that particular price?