Here is below my analysis for their FY 23 results. I hesitated to publish it earlier, because I had no particular view about their medium term growth potential.
It seems that the increase of net cash (4.3 m for FY 23) corresponds to the free cash flow (looking at H1 23 trends). So, according to these elements, this company generates a free cash flow yield of 16.5 %*(when the share price was at 3.9 c). That looks high, in particular looking at the company's comment for FY 24 (expecting more growth, coming from contracts already signed).
Obviously, FY 23 has been quite exceptional with a top line increase (+ 8 %), a gross margin improvement (from 13.5 % to 14.3 %) and further cost decrease (- 5 % for overhead costs). According to their comment, we can probably expect more top line growth in FY 24, but not much from costs (as they said that the reorganization is now over). There may be some more gross margin improvement, as their revenue seems to be driven by the high margin businesses (services).
Major differences between H1 and H2 : - during H1 23, CNW had an exceptional increase for the adjusted EBITDA which increased by $2.6 m to $2.2 m, but a rather poor cash flow from operation (only $0.45 m), - during H2 23, CNW had a limited increase** for the adjusted EBITDA (up by $0.1 m to $2.6 m), but a massive improvement for its cash from operation (cash flow from operation of 5 m). Perhaps one way to look at their results : they reached an EBITDA of 2 m+ for the 3rd consecutive half year.
Also good to see that the short term performance incentives of the management are based on adjusted EBITDA, cost control, professional services and annuity growth.
* inflated by the fact that the company is not paying taxes. ** due to a high basis of comparison
