I have been looking at this one for a long time, realising I...

I have been looking at this one for a long time, realising I must be missing something, because petepan, Rubino and Waislitz all see something of decent value here... and I think I was just looking too hard (see below). Have taken an initial position today.

If you take a look at the balance sheet changes over the last half, you'll notice the depreciation/amort charges do not sufficient cover the changes made on plant & equipment and intangible assets - so they must have sold off some equipment.
In addition, inventories dropped by a fair bit, exchange for cash (or in this case, repayment of borrowings).

Basically, it seems like the company is being 'cleaned up' after the mess that was the Syntheo JV. They've taken the hit for goodwill and other impairments, now they're removing the related inventories/equipment.

Now looking at the P&L, specifically expenses, Raw Materials consumed increased in the face of less work... Makes me think they just sold off inventory not required from Syntheo JV at a loss to recover some cash (I may be drawing the wrong conclusion here). This will ultimately have played into the Fixed Communications segment EBITDA loss (not responsible for all, but some).
Nevertheless, I could see how there would still be some hangover to deal with (not as much) in the 2nd half, causing this segment to possibly give a flat EBITDA result - the remaining segments should perform as they have previously (actually growing a little).


However, as has been mentioned, should Fixed Comms remain the same (or even cease to exist - which would give a better result), the 20c purchase price per share is not demanding in the least. I don't imagine it will be discontinued, but there must be room for improvement, especially if Waislitz is jumping in.

Basically a crappy company @ a good price. Typical cigar butt style investment.

They're the thoughts of this amateur - happy to have people point out the flaws in my analysis (I can go through calculations/metrics if required).

As a side note, petepan might not post much here, but his blog is extremely valuable and has taught me a lot... read it if you get the chance.

(Remember, I'm no professional, do your own research)

Edit: I see Thorney has already had an impact... I can't imagine a 6-month old CEO is replaced without reason.