Ann: Revenue Guidance Update and CEO Appointment, page-99

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Nightmarez3k

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04/01/18

11:03

Post #: 30033707
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Originally posted by madamswer ↑

"Any thoughts from value buyers.
Cash backing for near positive cashflow confectionary company."

@Nightmarez3k ,

Based on the criteria that I use to define value, namely Free Cash Flow generation, I'm afraid I cannot discern the value in this company.

Since listing in its current incarnation in 2013, this company has been a net consumer of almost $30m of capital (much of it going from the company's bank account to the bank accounts of its senior executives).

To fund this largess, the company has raised almost $60m via the issue of new stock over the past 4 years: of the $28m of equity capital raised over the course of 2016 and 2017, directors and KMP received a whopping $13.3m. [*]

Shares on issue have risen fourfold over the past 4 years, from a little over 50m in early 2013, to 215m today.

The dilution has been eye-watering.

Not my idea of a value proposition.
The exact opposite, actually.

The stock might go up from here, but not for any reasons that I am able to know.

[*] And that excludes the gains that they have made from what appear to me to be very generous stock awards. The company's remuneration report makes for interesting reading; I can't recall ever seeing more complex remuneration policies, providing all sorts of ways for the company's senior managers to clip the ticket including something called "Service Rights", which I had not encountered before.

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Fair enough.

Management can be changed.

The cash is real and the business is a start up and ramping up.

Maybe investment grade one day.

It has an ethical and sustainable product offering in the market.

YOW Price at posting: 15.5¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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