Winning work is the easy part; actually turning that work to the profit account, and hence to shareholder returns, is the challenge.
This company has done a good job in relation to the former; the latter, not so much.
The last two results have been poor; DH19 Profit Before Tax was down 60% on pcp and they made a $12m Loss Before Tax (that's after adding back the $24m goodwill impairment they booked) in JH20.
I'm a reluctant holder and from an earnings quality standpoint, this investment is really in breach of my investment process.
If the upcoming result displays the same inferior quality as the preceding two, that will make three strikes and I'll cease to own the stock.
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SRG Price at posting:
50.0¢ Sentiment: None Disclosure: Held
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