I find it hard to be sure where I sit here. I'll stay with HOLD....

I find it hard to be sure where I sit here. I'll stay with HOLD.

Here's the things I like:

• The result stood up against the first half of the 2020 year (the PCP) which wasn't influenced by COVID.
• The result was a slight improvement on the immediately prior six months.
• The Balance Sheet is conservative, even after obtaining the funds from the Capital raising and not spending it, with no debt to speak of.
• For the completed years (so ignoring the six months just completed), their after tax profit improved on the previous year by 3% for 2017, by 13% for 2018, by 25% for 2019 and by 15% for 2020.
• Their ROIC has remained above 30% for the last 4 completed years.
• Their strong belief that revenue will double to $200m by the year 2025
• Wilson Asset Management hold close to 8% of the shares with their last large purchase being notified on the day prior to yesterdays results release.

Here's the things I don't like:

• The reason for a lower than expected revenue number was "delayed negotiations" - the investor graveyard is riddled with those who listened to management from IT companies talk about how the next period will be better after "delayed negotiations"
• Funds have been collected from shareholders with a view to using such funds to acquire another business but the process doesn't seem to have gotten off the ground - they talk about being vigilant and disciplined in their Search but it's all a little bit untidy.
• At around a SP of $1.60 they have a trailing P/E of about 27 with the forward P/E not looking to be any better. That a big P/E for a company who's result hasn't improved across the last two six month periods

I think this needs to be watched closely but I'm hopeful.