Wow. When things don't go to plan, blame the company/shorts/insiders. That's one way to learn...
As for the media release, a few things worth noting:
$40m of revenue that's deferred ends up as $33m of EBITDA... Operating leverage is a double edged sword. (From the below two points)
"Following an accounting review of the negotiated contract terms on a number of large projects included in the 2HFY17 forecast, the revenue associated with these projects will be predominantly recognised in future periods rather than recognised as an upfront contribution in FY17 ~$40m"
"Impact of the accounting review as stated above ~$33m"
Similarly, $12m in revenue from Enterprise & Wholesale along with additional headcount impacts the EBITDA line to the tune of $10m.
I wish they'd split out the additional headcount, that way one can get a feel for the operating leverage at play.
Also, using these numbers and comparing to first half, EBITDA appears to be flat, but NPAT reduced ($92m 1H vs $70m 2H). Huge increase in D&A, likely due to NextGen and the large capex profile.
I really need to see deeper numbers (subscriber numbers, Enterprise revenues/margins) to prove my previous ideas. I was clearly wrong considering my purchase price, it becomes a matter of what I do given the facts I now have.
VOC Price at posting:
$3.35 Sentiment: None Disclosure: Held
