Just a humble effort to understand what the future holds for Zicom beyond the current FY.
1) Oil services.
Perhaps the most vulnerable.
EPC for gas plants may provide some cushioning to the impact of the downturn in offshore oil capital spending.
These EPC contracts are rather bulky & unpredictable , but ZGL's reputation may improve enough after the last 2 big contracts to allow it it to win more similar contracts.
No one knows when the turnaround in the oil industry will be...It will be scraping the bottom of the barrel for at least 12 months...Capital spending usually precedes the uptick in POO.
Reasonable odds for this segment to weather the downturn if ZGL wins a couple of EPC contracts in the next 6 months.
2) Construction:
I reckon we are at the extreme bottom of the cycle....A few in the sector are showing technical bottom formations...MAH , MND , TPP , BYL.
This segment will likely perform better beyond 2016.
3) The technology cluster/ PE.
Has been a drag on the business in the last couple of years.
# Investment in start ups.
# Retooling of the business to medical device (rather than electronics) manufacture with the unavoidable cost overruns.
Will we see the fruits of this effort in 2017 & beyond?
4) "Unlocking value"
This will be natural evolution of the business.....To spin off the PE/Technology cluster.....We end up holding part of the old school ZGL & part of the more nimble med tech business which hopefully will attract better multiples even with little tangible assets.
A Jekyll & Hyde business , this Zicom.
ZGL Price at posting:
15.0¢ Sentiment: None Disclosure: Held
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