The Directors may be wishing to make a takeover play? They now hold a significant number of the shares.
The operating cash flows for the first half were $4.2M which may indicate that there are potential profits ready to flow in the future. If the profits are low, then the share price is low which would make it a more attractive takeover target. Be interesting to see if the operating cash flows are high again with a low profit. The new auditors which started at the half year, (Moore Stephens from memory) may have their work cut-out if the Directors are interested in taking over the AMA Group? The reason being that the Directors may have a potential conflict of interest.
An example of potential conservative accounting was the large tax expense at the half year considering the large carry forward losses from the prior year. This brought down the profit considerably.
As a shareholder it would be good to know what their intentions are?
It would make sense for them to privatise the group and potentially sell some of the businesses back to the original vendors? The market cap of $16M is great value, they paid more than $16M for more than one of the subsidiaries that they currently still control.
Can't wait for the year end results, they should be interesting.
Well done, Ray and the team.
AMA Price at posting:
5.9¢ Sentiment: Buy Disclosure: Held
