Whilst there is a lot to like about the Company’s progress, particularly in respect of market adoption of newly developed products, the de-recognition of the deferred tax loss, IMO tends to dampen the overall financial result. The market’s may look beyond this, but more likely the SP is unlikely to reflect the true potential for a further period.
Must admit, in all my time investing never encountered an example where de-recognition has been applied. After taking a ‘starter position’ with RUL, had planned to build that position with the release of each set of results. On the EBITDA number and with the highly probable reduced Development spend through FY 2020, I would have extended my hold. Now, considering waiting 3 to 6 months.
All said, IMO, we are steering in the right direction. Cash Flow positive, no debt, AUD 20 + m in the bank and serious traction with ARR (see recent Ann’s) makes for a compelling buy. In my case, all about timing the extension of my hold.
Welcome other’s thoughts.
Rokewa
RUL Price at posting:
57.0¢ Sentiment: Buy Disclosure: Held
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