This is a great report that has completely gone past the market...

This is a great report that has completely gone past the market because of the lackluster NPAT number on the front page. But that said, management flagged the weak NPAT because of the on-going growth efforts, and they still exceeded the guidance they did provide.

The company still continues to pump out cash. Dividend yield is solid around 5%, and it wouldn't surprise me to see another capital return in the future if money can't be spent in better areas.

The revenue number is the only red flag for me. Competitors squeezing prices and taking market share was cited as the major impact, but you would hope the marketing measures taken over the last couple of years can help to increase market share. I think there is a good chance for a turnaround here from a few areas. CTE may win back market share through their advertising and marketing efforts which would validate management's decision. Alternatively, it is also very likely that we see a natural growth of the market itself if Australia can increase it's cord blood/tissue storage rate up to the same rate as other developed countries. This will most likely occur as a result of more breakthroughs with stem cell technology encouraging people to store their babies stem cells.

There may be a sign in this report that this is happening already, as Klogg pointed out the 21% increase in unearned revenues from last year. I haven't gone back through prior reports to see whether it is just luck in timing (maybe last years figure was low) or a genuine long term turnaround, but at least we have some numbers to go on with regards to judging whether management's strategies are working.

It is just so bloody hard to get a position in this one. Absolutely no liquidity at all. Very impressed with the report though, will continue to watch in case some liquidity arises and I can get in.