Just looked through some recent updates from the company, as well as a few researches here and there.
What I like:
- Increase in recurring revenue in the form of Managed Service. I estimate it to be around $14mil for FY22. - Current MC is about 2 x Recurring revenue - Increased focus on Service revenue (Managed and Professional service). - H2FY22 is much better than H1, hopefully the restructure and turnaround is a success. - Directors (Mr Everingham and Mr Waterworth) have been buying on market. - Mr Everingham seems to have a good network in WA and ACT, while Mr Waterworth seems to have an investment analyst background. They seem to be the type of person who can realise and capture a good opportunity. - Cash of $9.6mil (1/3 of MC)
What I don't like:
- Enterprise product still accounts for more than 70% of revenue. - Top 4 clients look to account for 30% of revenue. That's a risk to me. - Q4FY22 seemed to be not as good as Q3. I suspect it is because of the election. - Webcentral still hold more than 150mil shares (figure at 31/12/2021). This is the biggest overhang that have been suppressing the share price imo.
I have already bought some shares.
CNW Price at posting:
3.2¢ Sentiment: None Disclosure: Held