I think a lot depends on: 1. whether they can deliver the top end of their new target H1 NPAT ($30m) or just limp to $25m or (heaven forbid) even fall short of that and 2. whether H2 is stronger as they're suggesting and if so "just how strong"?
On the plus side the market may be overlooking the fact that they've acquired 2 new businesses that seem to be delivering strongly. If Dec 31 is the high water mark for net debt, they turn a lot of that new inventory into cash and deliver (say) $28m NPAT for the half year followed by (say) $42m NPAT in H2 then there's a good chance of some sort of rebound.
But that's a lot of ifs. Just as likely they'll strike some issues integrating the new businesses and/or rest of world equipment sales begin to slow. I've taken a modest position but waiting on the next update from the company to see whether they've righted the ship or whether it's still taking water.
I'm sitting right on the fence but I certainly don't want to see ANY more acquisitions until they've addressed their cashflow issues.
CDA Price at posting:
$4.10 Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)