Agree it would be good for directors to be more aligned, however could be a bit weird given how little liquidity there is.
We are six years into declining EPS, after significant run up from mid 2016. So P/E ratio has 'normalised' probably, and not clear what actual value in NTA given large whack of inventory and receivables? Maybe that explains the price, which does seem very cheap.
Also, who is an eligible buyer of this stock? It falls through the cracks between instos (too small and illiquid), and retail (too boring), like a diamond in the rough IMO. So likelihood of being priced efficiently seems low.
Operating result for FY24 very similar to FY23, but with a larger tax bill seemingly driven by taxable WA grant, which is a one-off, and we should be able to utilise carry-forward tax losses again this year if I'm not mistaken (not an expert). EBIT was flat from FY23, EBITDA higher, and growing from low base set in FY22. So there is an inkling of earnings momentum...
If we get an uptick in revenue, particularly from GEMCO, and operating cost pressures ease this financial year (which seems likely), there will be some good operating leverage and will feed nicely down to EPS growth for the first time in 6 years. What likelihood of uptick in revenue from GEMCO? Some positives include iron ore prices seem to be holding above $100, potential Chinese stimulus, investment in Pilbara coming online, and deferral of works reported last financial year catching up.
Also, net operating cashflow from last financial year was beast mode at $25m, putting us in a much better cash position. Book value has been growing nicely and I think puts sensible floor in valuation.
Very interested to see how we fare in H1.
Add to My Watchlist
What is My Watchlist?
