Yes Pierre though I suspect that the switch to TCE means a lower...

Yes Pierre though I suspect that the switch to TCE means a lower regular margin than in history for Simpec, hopefully without the unexpected occasional losses, and as you say still profitable.

On the plus side both Alltype and Watmar have higher gross margins than Simpec and on your numbers will increase in relative size this year at least (from 30% to over 40% of revenue). Though Alltype had a jump in segment overheads in the half year that reduced its operating profit from 7% of revenue last year to 2.8% and below Simpec..

I am still puzzled by the accounts. The contract assets (work done but not billed) fell by $12 million. This should have meant very strong cash generation as the amounts were invoiced for work already expensed last year.

Yet operating cash flow only lifted by $3.5 million, though it was at least positive. The explanation is probably that trade payables halved by around $18.8 million from 30 June. That is they probably delayed paying bills in last year's accounts given the negative cash flow position.

There is also a jump in contract liabilities by $7.5 million from only $600000. Contract liabilities are where the client has been invoiced ahead of doing the work. I wonder if this relates to the new TCE as the amount will depend on how contracts are written. This is a regular entry in contractors accounts (eg Civmec and Duratec) so is not unusual. However, it would be useful if WSI provided a commentary on the accounts that explained changes as many companies do. Too much to ask as they are in the bunker.

While on the face of it the shares seem cheap I am still cautious given the lack of information the company is providing so I remain a hold. Civmec is also cheap with less downside in my view.