- Customer contract amortisation of $2m per year. This should be considered a tax benefit more than anything, given it's not reflective of cash flows.
- The Weighted average number of shares is something to be wary of. Whilst it's accurate to use this number as the denominator for EPS calcs this FY, next FY it will become 159m shares
- HP contract changes in May will prove beneficial to DDR
- Land purchase can only be viewed as a positive. They only recently increased capacity of the current site, and it is close to its limits.
- Reference to working capital: "Working capital days increased by 15 days. The increase in working capital days was as a result of selected working capital investments to take advantage of enhanced margin opportunities"
In other words, they're either investing in process changes to enhance margins, or new lines of work. Given their track record, this can only be a positive.
DDR Price at posting:
$1.56 Sentiment: Buy Disclosure: Held
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