GSW (ASX) Ann: Appendix 4C and Quarterly Activities Report

Originally posted by dim81: ↑

I'm glad you are still holding PK.

I remember getting a copy of Logos public accounts close to the acquisition and not worrying about them running out of business.

The thing I did notice was the off balance sheet liability for their employment provisions, I don't think they had taken up any accrued leave and GSW would have to take up the provision through the P&L in one big hit, leading to a significant "loss".

Also, as you have said yourself in prior posts, Joel and Bane have been conservative in the financials, by not capitalising any development expenses. If there MO was to deceive, this would be their first course of action, capitalise development expenses, amortise it over 10 years and recognise a profit. They have rather, expensed it all.

All the expenses have been front loaded. The revenue from development is recurring and will flow for many years. The unit economics from switching to in house from menulog and co, which obscenly take up to half the order value whilst losing control of the end customer, are proven.

This will be one long slow build of intrinsic value. Slow being the operative word, and one that would make an investment banker used to deals with frequency much faster to look elsewhere.

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...thanks @dim81....was part on my original investment thesis: deemed vulture capital investment... but only ~5% of my ASX portfolio... so worth the risk....and I have been patient these last 18 months...but the take up of those performance shares threw a curve ball....I have to hit ethical KPI's...and these kind of shenanigans are deemed unethical...hence the change in the timing of my exit strategy...

Logo's acquisition price appears to be very low for a company that is financially sound after 30 years.... but then again....I don't have the full picture on potential synergies etc. ...so conjecture.....Not sure that I understand the off balance sheet issue... those kind of liabilities are pretty 'vanilla' reporting issues, especially for a company with 140 staff & only $14M revenue... also not sure I understand the 'big P&L hit'....are we talking about P&L or cash?...if cash pay-outs ....the acquisition price should be adjusted based on non-disclosure....or what am I missing?

....if you don't mind, could you please explain: 'The unit economics from switching to in house from menulog and co, which obscenly take up to half the order value whilst losing control of the end customer, are proven.'....my technology knowledge sucks.... only invested in a few tech stocks these last 10 years... but they are pretty vanilla...Tencent, Facebook etc.... so, please assume I'm the stupidest person you have ever met, when you explain it...

...my two cents...