Originally posted by usagi44:
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Despite some of the bullish posts that precede this one, it's becoming hard to resist feeling a bearish bias toward MSV. I’ve held the company for around two years now. Management have spoken of favourable conditions for much of that time, yet never quite manage to produce quarterly numbers that match their upbeat commentary. While the latest numbers are hardly poor, neither do they look especially good (i.e. consistent with management's assessment of conditions), and shareholders are once again being asked to be patient for another quarter...or two...or three while the ''organic growth strategy" completes. I want to believe, but feel like I’ve seen this movie before. Below are some excerpts from MSV releases since early last year. The company has been describing conditions as “favourable,” “strong” and ‘’buoyant” for a while now. (Italics are mine.) 26 Feb 2021: H1 2021 Earnings Call …market conditions are the strongest that we've seen for quite some time, supported by a lot of commentary in the media in recent times…government stimulus and subsequent investment infrastructure and other projects, copper, base metals is going to be very strong moving forward. 15 Mar 2021: Half Year Results Presentation Solid operating base to move forward on in a strong market . Market conditions are the strongest we have seen since 2008 Based on current market conditions, commodity prices, current contracts, and strong opportunity pipeline, Mitchell Services expects opportunities to exceed available rigs. …we will take advantage of a strong drilling market , increase in demand and accelerated asset innovation program 26 May 2021: Wilson’s Rapid Insights 2021 Presentation Based on current market conditions, commodity prices, current contracts, and strong opportunity pipeline, Mitchell Services expects FY22Revenue and EBITDA to continue to grow. 25 Aug 2021: Annual Report 2021 As we look past FY21 and ahead towards FY22, the business is extremely well placed to take advantage of buoyant market conditions and execute on its organic growth strategy. [Nathan Mitchell, Chairman’s report] As we reflect on what an extremely busy and challenging year FY21 has been, I note that the outlook for the drilling services market is the strongest it has been since our re-entry into the Australian market in late 2013 and the Company is well positioned to capitalise on these positive fundamentals based on the size of our current tender pipeline and planned organic growth strategy which we expect will translate into strong future earnings. [Andrew Elf, CEO report] 21 Oct 2021: 2021 Annual General Meeting Chairman’s Address As we look past FY21 and ahead towards FY22, the business is extremely well placed to take advantage of buoyant market conditions and execute on its material organic growth strategy. 31 Jan 2022: Quarterly Investor Update The broader industry outlook for drilling services demand remains the strongest that we have seen since 2008 against a backdrop of extremely positive industry fundamentals With both the supply and demand fundamentals so strong for the business it’s really starting to get exciting.
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Hi usagi44 I appreciate your thoughts and understand your frustration - my view below Revenue was little softer than I expected – but explained very transparently – makes perfect sense and to me and not in the company’s control – so no long-term issues
EBITDA – spot on
Operating cash flow I thought was good given they are in ramp up stage - net debt reduction in this environment I think was a good sign (re what will this be when the expected cash flow kicks in).
Looks good re capex finished by June 2022 and obviously they are looking at Net cash generation over the next few years
(SMS) settlement - good to see more re they have delivered on their promise.
I still think there is upside to the Gold price given the inflation numbers – Gold has been sold in the last week as the US dollar has risen but everything has been sold off in the last week or 2.
Can’t understand why anyone would sell this stock at yearly lows based on this announcement today.