I drafted my comment at time when announcement was made but thought to look other's view. One thing everyone here has common that there is strong desire from shareholder to change the management who has consistently failed to provide any shareholder value (Dividend/SP Capital Gain/Diversification with acquisition for growth). Yes, they did managed to give themselves and staff 1.7c options when market price was 3c ... IMO..!
Looking at past 9 months (since July 2020), this is the second announcement where company talked about winning contract first was 6th July 2020 and then this one on 12th March 2021. There was one more in November about claim that company is going to see record half year outlook with mention of some contract in there.... but we all seen what record they achieved in last six month... when share price went down 8% on the announcement to the market on their "Record outlook"... .. IMO.
The announcement on 6th July states very clearly "None of the contracts referred to herein are considered material to the Company’s financial position in and of themselves,... "
This announcement came in yesterday was worth 13M over 3 years which on pro-rata basis may be $4.33m/year which again in my opinion is not considered material... for company with 100m revenue per year. However we do need to recognise that they got new client on board which is important.
So all this 9 month if anyone look at announcement there is more announcement on "EXERCISE" of option then "WINNING" contracts or "AQUISITION"... which shows management lost a touch and has no visible growth trajectory or strategy that is given to shareholders ... IMO.
Regarding margin, we can not look at margin in isolation of individual contract. Page 26 of the Last F/Y report says revenue was (95m) and expenses were (94m) so net margin was (1121912/95136463) = 1.18% (approx.) which is significantly poor margin delivered by the management... but even after that poor margin they gave themselves and staff discounted price option... ! There was 3.11m cost as "other expenses" in that P&L but I can't find any reason for that cost and that is something management should be clarifying in the annual report... and I am not sure if anyone bothered asking this in AGM... ! iMO.
So it doesn't matter whether this contract gives you 40% or 80% margin if your management is not good then you will end-up with P&L margin of 1.18%... IMO
This type of announcement helps insider/day trader who buys before the announcement and then sell on news but it won't create any material value to shareholders and doesn't reflect that company is in good hands... IMO.
I am not a charting expert but here is something I tried off Yahoo finance and as you notice the price is playing between 2c to 3.4c for last 5 years and it is not because Sinic is buying & selling but because management has not performed to the level where market can react to their performance...... IMO.
Why SP that went high from Feb 2019 and gone down in Feb 2020 never recovered? Is it reflection of management performance? Is it reflection of massive 60m options granted at discounted rate and 17m of those are now exercised ? ... I am sure many of you know the answer... IMO.
TNT price moved up 9.26% yesterday and they are added into all ordinary by S&P Indices but here even with announcement share price didn't made more than 6.9% ... ! I am not sure if CNW is in S&P indices or not.
As I said before, I see value in the business but I don't see this management can take it any further so a new smart dynamic leader with better experience & skill in the industry is what CNW needed in order to get us to new heights, grow & diversify and create shareholder value. ... IMO.
Hope company consolidate shares, cancel all outstanding options and declare dividend in August and obviously new leadership to take the ship to better place. .. IMO.
