I believe Rothbard is correct. My assumption behind Darren's "going and returning" was that he always had a long term plan of firstly building the company and then "semi retiring" to a quieter life as a Director/Chairman. However, when he tried to implement that, his importance to the company (as its key innovator) was underlined when performance fell off, and he was forced to revise his own personal strategic plan. I don't believe there's anything more to it than that.It follows that there is some risk associated with Darren's importance to the company, but he is relatively young and has a lot of "skin in the game", so I feel confident that he will remain CEO for many years now, or at least until the company is financially transformed.
I also agree broadly with Rothbard's sanguine view of this week's announcement. It is disappointing that a second profit warning was necessary just seven weeks after the initial one. That is rather poor. I am also surprised that last year's $800,000 profit has entirely disappeared due to "competitive pressures and project delays", despite export sales actually increasing. One hopes this domestic hiccup can be quickly turned around. Nevertheless, our investment premise doesn't hinge on a few hundred thousand dollars lost in 2018/19...it hinges on the actual profit outcomes in 2019/20 and 2020/21 (especially) once the current potential for a significant lift in export earnings (hopefully) materialises. It is this upon which the company's fortunes (and it's share price) will rise or fall. We won't much care about the 2018/19 profit being zero if in two years time the profit is between 1-2 million, which remains my expectation.
I anticipate now that when the 2018/19 result is announced, there will be considerable angst and handwringing, especially by "Nervous Nelly" small investors, but that the disappointing result will also be accompanied by positive commentary around export potential getting closer to realisation, and that this might even be the catalyst for the share price turning back up again, ahead of those profits actually being realised, which I don't think is too far into the future anyway.
Anyway, never a dull moment, as is not untypical with investments of this type!
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