Good Moderate Growth, page-3

I dunno. I wasn't very impressed. Yes, good revenue growth, mostly organic, but Revs still growing faster than profits. This period they said operating costs fell (as a percentage of sales) while gross margins were the culprit and went materially backwards. But, IIRC, reducing margins has been an ongoing trend. It's one thing or another, but margins don't seem to be increasing. I just don't understand that, shouldn't there be some scale and scope economies which improves margins in a business like theirs? And, IIRC, they keep forecasting a continuation of that trend of profits growing slower than revs. So, what happens to profits if sales slow?

Also, still quite heavy requirements/growth in assets, and in working capital. Eg, revs for the 6 months were $61.7m, but required $37.4m of inventory and $25m of receivables. Ie, takes 6 months to turn an inventory order into cash. Also, still ongoing heavy capex. What do they keep investing in, and does it lead to better profit?. I'm just not convinced.

I also get the impressions from the presentations (not checked) that they are often highlighting new products, new innovations, etc but to me, this company just doesn't deliver enough, given the potential. Does mgmt care too much about doing/selling new things, and not enough about financial outcomes. They claim they do the latter, but I'm not sure their claims here stack up. ( I acknowledge, I haven't demonstrated that in this post!). All IMHO. GLAH