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GO2 the go2 people ltd

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Its probably more clear now that the company was basically...

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Gharp

5,649 Posts.

1030

17/03/23

14:08

Post #: 66824586
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Originally posted by NK4020: ↑

Bravo....looks like someone's been to a 'business basics' course. I really can't believe the level of detail they've laid out here and wonder if they realise how average it makes them look. This is a cash strapped business and it's only now they're looking to debtor finance for Skill Hire and openly stating the benefits it will make to their working capital headroom!

And this statement 'Labour hire businesses are more commonly funded by debtor finance facilities'. I'm serious. Did someone just go to a seminar and work this out and decide to tell the rest of the ASX in case they didn't already know? Maybe Stan from SkillHire stuck his head out of his cubicle and asked Gary from GO2 how he manages his cashflow when his labour hire book is rapidly growing (Note: not real names).

Folks, this is a business which has today stated that they have only now looking to implement a 'more appropriate source of funding' which will provide 'further working capital headroom of some $1m - $1.5m to fund continued growth' followed by the final dot point 'Continuing to pursue other capital raising and potential M&A opportunities'.

I don't know. I could be wrong but maybe it would have been good to be looking at this in November when they got the ATO payment plans, and before they went ahead with the 'Non-renouncable Rights Issue to raise up to $3.253 million'. But hey, let's celebrate a sub-$200k improvement in the balance sheet as the first highlight in this agreement.

How about you drop off with the talk of acquisition and focus on polishing what you've already got. Maybe give us existing shareholders comfort that there's no further downside. Remember this bit 'Notwithstanding their substantial shareholding positions in the Company and, in the case of the Hunter Vendors their executive roles within the Group, there is a risk that these vendors (or any of them) may make claims against the Company in relation to the unexpected superannuation liabilities. Such claims may include allegations regarding non-disclosure of the circumstances relating to the liabilities'. Maybe sort this out before you think about another acquisition hey?

While you're at it, put your que in the rack with the capital raising initiatives and just focus on operating and optimising the business without the endless distractions.

Buy/Held recommendation remains but not at any price. It appears the market agrees with the buy side anchored at 0.8c per share which probably represents a reasonable entry point given the dilution pending.

I do think there is an upside here if they can get things right and obviously Darren and Shawn do as well given their enthusiasm to take shares for Directors fees through to June 2023 (which shouldn't be necessary when they get the Skill Hire debtor finance facility sorted out - feel free to lay off on the dilution of existing shareholders fellas. There are still some of us out here that aren't insiders!).

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Its probably more clear now that the company was basically insolvent at the merger time with all the ATO debt. The "merger" was basically skill hire taking on these liabilities and getting the rest of the business basically for free. Looks like they are going to do everything possible to try and get as much cash left as possible. 'Accelerated payment of 1.5million" and taking 1.9million in share's is probably the best they can squeeze out of the company after the last failed raise before it goes into administration rather than getting nothing.

GO2 Price at posting: 1.2¢ Sentiment: Sell Disclosure: Not Held
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