Ann: First Half Trading Update, page-57

The issue is that APM has been borrowing to effectively buy short term contracts. There is no moat from entry of new participants in the market. I can't comment for ROW but in Australia the focus of the industry is to remove the dishonest participants that are taking advantage of people on the NDIS. That is, cancel contracts of gardeners, maintenance, assistance providers, etc that would charge multiples of what they would normally charge commercially.

I have a family member that works in the NDIS department and there no intention of changing the existing policy, only ensuring that it is being appropriately managed with proper oversight. The government is focused on ensuring that people with disabilities are able to look after themselves and provide the policies to facilitate this. The focus is to remove the corruption and scamming (similar to the to the education scams).

More than likely the government will prefer to work with larger operators than small scale ones as it is easier to manage. So there will be a role for companies like APM going forward.

That being said, when I bought a couple of weeks ago I looked at the strategy and the PER and forgot to check the balance sheet/NTA. I did not consider that management was so inept to be borrowing such significant amounts to build the business and buy contracts that can be won for negligible cost. I may be showing my age, but this just reminds me of ABC Childcare that blew itself up on debt.

There is nothing stopping new operators that are more appropriately capitalised to take market share away from APM.

So back to the likes of companies @hhonner have compared APM to, these are completely different and have a moat that protects their market.