I believe this was a company very highly rated by that man C Lee from Kapiti . He had dinner once with the CEO I think.
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Wouldn't want to repeat H1 cash burn of $33m with only $24m in the bank would they
Doesn't look too good does it, this statement is a worry, very ambiguous:
"Cash balances at 30 September stand at $24m. The net cash outflow for the period of $33m reflects the Operating Loss of $17m and an abnormally large movement in working capital items. The outlook for continuing revenue growth and improved EBIT is such that we believe that the company has sufficient cash and facilities to execute its strategy until profit is generated, which we expect to occur in FY2018."
- loss therefore has a $16m "abnormally large movement in working capital items" (not specified).
and
- sufficient cash and facilities (unspecified)
- barely any revenue growth but "profitable in FY2018" (unspecified).
Very vague, rather disconcerting. Not to mention the acknowledgement of US market 'challenges' and yet it is the largest most critical market to OHE.
No wonder the market is uncertain and giving the SP a right royal hiding today. Down 2/3rd's from IPO. Not a good look, not good at all.
Which may also beg the question, why did they IPO with such a high SP? $5.70 wasn't it? That's a huge market cap for a company making massive losses without a large cash reserve... Jeez, Xero got to that sort of market cap only after Peter Thiel threw another $50m of his own money into it (with others).
Disappointing result in terms of growth, basically flat. I think people are especially wary now after WYN...
Once OHE is cash flow positive this company will spit out cash by the truck load, the trick is when will that happen, even if there is a need for more cash in the market they are which is massive they should make it, once that happens they will attract many suitors from the U S, but how long will that take?
Baabaa - that working capital movement is mainly made up of $8.7m increase in trade receivables and a $14.2m decrease in revenue in advance. (Note 12 in Interim Accounts)
Yes thanks, been going through the details and as you say it is specified in the notes, but not in detail, fortunately it's "abnormal" so won't happen again, or would that be 'one-off'? Going to be a long wait for shareholders until FY results in March, which presumably won't be announced until April/May sometime.
I feel for shareholders, this whole OHE thing got off to a dubious start with the IPO pricing and it's been a nightmare since then. Hope it pulls out of the nosedive soon, albeit at some point it will appear to be a bargain buy for those who can assume the (small?) risk that it won't go belly-up.
Just another blow to confidence in the NZX listed Tech sector. Not fatal so far, fortunately.
Well BP, those technicals amounted to nothing (I'm throwing that chart in the bin, there's nothing useful that it can say down here after today) and the market says the news is not good news. Kind of ironic that on the very next trading day after your post, the technical support $2.45 failed bigtime on the HY report news and -45 cents or -18% later the SP is at $2.05. Very unsettling, now the long wait for good news, really really good news.