Ann: DRP Shortfall Placement, page-4

The real question is why they flicked the DRP switch, given they finished the FY2019 year with more than $53m in cash (and no debt), along with $64m in Work-in-Progress, offset by $24m in Payables, Net of Receivables) and $13m in Deferred Revenue.

Current Assets exceeds Current Liabilities by $68m and exceeds Total Liabilities by $59m

In historical context, Current Assets Less Current Liabilities is at an all-time high:



So, again, why the need to conserve capital?

One obvious reason would be to fund further increases in WiP.
That would, I think, be a good reason.
(But even then, it's a highly bankable business in the sweet spot of its business cycle, so the banks would have been more than willing, and on decent terms, to provide it with a $10m or $15m working capital facility.)

Another possible reason would be to build firepower for a pending acquisition.
Which I don't think would be a good reason.


Either way, at ~3.5x EV/EBITDA, equity is a pretty expensive source of capital
.