Fy 14 and Fy 15 were interesting years and a period of learning...

Fy 14 and Fy 15 were interesting years and a period of learning the hard way for Charles, which culminated in a loss of (750K) in FY15 when the Controller Business was written off and exited.

During those years VMT had an agreement to manufacture products for Power Eagle which was servicing the Chinese markets with cheap product and VMT's Emax brand was being predominantly sold into the cheap end of the international market,Vietnam , Africa and Iran. The average selling price per unit was $550 and the gross margin was circa 16%.

When the OEM agreement with Power Eagle expired in at the end of 2015 a 50/50 Jv with power eagle was formed and Charles education continued. Whilst the JV didn't perform well because of a glut of product coming onto the Chinese market causing government restrictions to be put in place in the major cities the Emax brand started to make headway in Europe selling better quality bikes to business customers in delivery and ride share.

The share price was 56c in May 14 and when it dropped to 23 cents in Feb 16 Charles Chen started to aggressively buy shares. His first purchase was 3.8m at 23c in february 16.

later in 2016 he followed the price down buying 5 X 100k parcels starting at 10.5cents and finishing at 6.74 cents.

Power Eagle like the other acquisitions did not perform to expectations.

The bottom fell right out of the share price when the $2m forecast profit was revised down to a $1.2m loss In Nov 16




Philip Chambell a respected director and Company Restructuring Consultant came on board as chairman in June 17 and in nov 17 the company was restructured wtih a new 5 year business plan to concentrate on high end product in to International markets.





With the Chinese Power Eagle sales eliminated revenues dropped and the share price dropped to 5.5 cents which was about half the nett asset backing. The nett assets were predominantly the factory which was carried at depreciated cost which was way less than its market value. Thats what attracted me to VMT. At that time you got the factory for less than half its value and the business for nothing. The other thing that attracted me was Charles' appetite for purchasing shares on market.

He started buying shares for 5.5 cents in April 18 when he had 12m shares. By December 18 he had 15.6m the last of which he bought for 4.86 cents.

In June 19 he bought 5.2m at 10 c which took his total to 20.8m.

I don't think you need to worry about him doing deals that dud shareholders.

Since then a performance plan has been reintroduced which structures Charles' (MD) and Ivan's (FD) remuneration in a way that the lions share is performance based and in shares not cash.

They are both more motivated as share holders than paid in Cash executives.

The business is performing better than others in the sector with 1st Half 21:

* Average unit selling price of $2869
* GP margin 27.1%
* NPBT margin 11.8%

The big plus is the growth that has been achieved last year and this year to date in spite of covid.

While Q3 is not normally the best quarter because of European annual close downs for the summer holidays there was a very strong opening order book. So fingers crossed the update due shortly for the Sept Quarter will be share price booster.