So Decmil's gross margin has shrunk by 43%, from 11.4% to 6.4%. There's a red flag if there ever was one. There's no point in building a bigger order book at the expense of profitability. This strategy of bidding low to win work was never going to work and has led many companies down a path of no return.
The other red flag is on the cash front - $50M in cash + current receivables but $58M in current payables. So which suppliers are they holding off paying? I know they have lending facilities but they should not be needing to dip into them to cover operating costs.
DCG Price at posting:
26.5¢ Sentiment: None Disclosure: Not Held
