Profit before depreciation if i rememeber properly. Remember - they have to cover depreciation on a $30 million dollar asset before they can record an overall profit. From memory they were just better than CASHFLOW breakeven for the second half, they need to do a lot better than that.
This is only my speculation that they won't last more than 2 years. If you think they will be able to move their cashflow from breakeven to a profit of around $7 million a year in the next 2 years, then they will survive and you are on a good thing. I would be asking myself "well why can't any institutional investors see that"?
You also have to assume that if the market their becomes profitable, companies like unwired or BigAir will move into Geelong, set up a couple of antennas and go and grab some market share by undercutting the price.
Small caps are high risk, high reward and i like it. But even for me, NCA is one I would not touch for now. I even think my PEO is risky, and they are much healthier financially, have insto investors, a share registry with some very high profile players etc etc. How anyone can hold NCA with anything other than just a couple of thousand is beyond me.
