Why is everyone ignoring the fact that the fundamentals have not changed and have only continued to improve...?
The quarterly read well and the numbers were for the most part quite good (I do agree the PMOC line item was a touch high but DW8 is a start-up, so high costs across the board are to be expected when investing in listed-VC so no one should be surprised). Nevertheless, I have reached out to Dean to better understand what is included under PMOC.
The good news is that acquisitions have halted for now so we will start to see the synergistic net benefits of bolting on Kaddy/Parton's. The business is cashed up with another 4.6M coming this month so the focus right now is growth and they have never been better positioned to capitalize. We've only seen 3 weeks worth of Kaddy and that business is the true 'company-maker' when you add logistics to the equation. On the topic of suppliers, this was up 74% to last quarter and some larger suppliers are expected in the March quarter. Dean has previously mentioned how significant just one large account can be on revenues so everyone needs to be patient and not forget that it only really takes one big account to completely change things.
For what it's worth, I have met Clinton Lander personally during his tenure at Envirosuite. He was the CFO at the time when EVS acquired EMS for $85M. He is a really good operator and I can not speak more highly about how he dealt with the transaction team of advisers from Macquarie Capital/Ashurst. I see him as a much better suited CFO for DW8 as it continues to grow into a larger, more respected Australian tech business. We are at a stage where we require a good commercially focused CFO to join the leadership team that has experience scaling a tech business. Matt served well during his time at DW8 but onwards and upwards.
Reading some of the crap on here the last few weeks has been sickening. If more of you took an hour or two, read prior announcements and try to understand the type of business Dean is building, I honestly don't think you will find a more undervalued business in the ASX tech index at the moment. This disconnect between the strong performance of the business and the weak share price is an opportunity I am taking full advantage of.
Cheers & thanks for the analysis Steve + Co. Always appreciate it.
DW8 Price at posting:
4.4¢ Sentiment: Buy Disclosure: Held
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