In all due respect it is good to keep your comment in perspective and note points like -
- this is a company that has only just transitioned to a more managed services which is aimed at boosting nargins and creating annuity cashflow. DTL have been making this transition also and is a much larger task but margins are improving as expected. Yes it is not a high margin product but room for growth is strong and I would take existing trading model with good management team over some start up tech stocks based on concepts any day
- management have well and truly enough equity in the game and also options out there to be issued on acheiving certain growth benchmarks which include EBIT growth
- this half included a huge level of one offs including wage costs of at least 220k for previous director on listing, expenses relating to work completed in June 15, management services division set up costs, acquisition of L7, listing costs and the large 5.6m non cash expense for previous business. On info available this is over 7m in one off costs that will not occur moving forward.
- L7 business expected to have positive contribution to bottom line and will reflect in next quarterly. Managed services will boost margins. Synergies will result
I think the next 2 qtrly will tell the story and paint a much better picture. They are playing in the right places
CNW Price at posting:
2.9¢ Sentiment: Buy Disclosure: Held
