Graeme Newing's comments to the change in guidance.Revenue...

Graeme Newing's comments to the change in guidance.

Revenue guidance for 2020 was cut very sharply to $30-40m from the longstanding $50-70m range. The extent of the fall, from $60m to $35m based on the middle of the range, shocked me. The revision came despite the disclosure that no projects have been affected by the coronavirus as yet, and that in the directors’ opinion they are unlikely to be affected in size and scope. But size and scope is one thing, timing is another, and a delay to some projects has now been assumed by the directors, taking into account the risk of secondary outbreaks that could cause governments to reimpose lockdowns.The company contacted me this morning to inform me that there had been no selling by any employee yesterday and so I withdraw the comment made yesterday; I had speculated that this might have been one of the factors behind the fall.It is difficult to determine where the shares will end up in the short term, for example whether the March low of 29¢ will be revisited. But what cannot be disputed is that the company is in a strong financial position with $35m in cash and $16m in receivables. My view remains that has a bright long term future and on that basis the shares would appear to be extraordinarily cheap.I don’t have the energy nor the time to write another research report at this time. It goes without saying that my valuation will have to be reduced but I would think it will still end up being some multiples of the current share price.

I found it interesting that the company had been in contact with him after the comments he made on Monday, so they are defiantly
watching and listening to their share holders. He is bigger than the average though.