USS Canberra commissioning, page-19

Thanks for posting this. I’m always keen to read the bearish/Shorter thesis. Eyes wide open in this market & economic environment is essential, especially too in the sort of sector Austal operates.

In my opinion:

Re 1 - irrelevant, it has been dealt with here by the laying of these charges. This is the “second cockroach” he alluded to.

Re 2 - good point on board (in)experience post turnover. And it might be time too for Rothwell to hand the chairmanship over to an independent. Politically this would likely assist the company in Australia near term, given Labor holds state and federal government at present, and given Rothwell’s ties.

Re 3 - 2017 tax & audit matters are ~6 years ago now, so it’s largely irrelevant.

Re 4 - ISS score links back to point 2 above and is useful to know.

Re 5 - this is a valid point. Uncertainty still exists over their competency in contract pricing, guidance has been restated to the downside, yet the dividend level is maintained. Don’t get me wrong tho, I like dividends.

Re 6 - 2013 is ancient history and it’s stupid to be red flagging these minor health & safety events now.

Re 7 - I have no doubt the company has dealt with this effectively by now and that Govt agencies (both US and Aus) have been involved and have assisted. No defence contractor is immune from cyber attacks, whether we get to hear about them or not.

Re 8 - very valid point. On-market director buying has been dismal and at recent levels, (given the claim of a $7B order book), pretty inexplicable.

Re 9 - another very valid point. Active institutional investment is lacking here.