If I may offer my two cents' worth... I felt the standout aspect...

If I may offer my two cents' worth...

I felt the standout aspect of the results to be cash flow. Cash from ops of $31mn less maintenance capex of $11.1mn equals free cash flow of $19.9mn. This, in turn, equates to a FCF / market cap yield of 16%. For what it's worth, Wilsons' and Morgans’ most recent estimates of FCF for FY20 are AUD17.2mn and AUD15.2mn, respectively, quite a bit below the $19.9mn result. With management (on the call) indicating that an EBITDA margin of 20% should be achievable going forward, the outlook for cash flow seems quite positive.

It does look as if MSV overpaid somewhat for Deepcore given the additional amortization charges taken against customer contracts; however, in response to an analyst question on the call,  the CEO was quite emphatic that the additional charges are “definitely a one-off adjustment.” As I understand it, the charges will recur, but not at the accelerated rate applied in FY20. Further, the Deepcore acquisition affords exposure to the Victorian gold producers, and will hopefully continue to bear fruit longer term.

One concern is what they do with the cash. On the one hand, the priority appears to be to pay down debt, but then there's this remark from the CEO on the call, which also flags a growth bent: I think fundamentally, what we're looking at is just a 3-pronged approach, which is really trying to get the debt down, obviously, we'll adapt to our shareholders with regards to either a buyback or a dividend and growing the company. There's also this slightly unsettling reference to possible M&A in the presentation materials: Maintain a strong balance sheet to provide flexibility to take advantage of strategic opportunities. I'd personally prefer to see a dividend or expanded buyback once more debt is paid down, rather than another acquisition (unless on extraordinarily attractive terms).

What to do with the stock? I'll probably add some more if it slips further or stays around these levels much longer. It's my hope that the owner-manager structure will guard against any really wayward M&A activity.