Hmmm, "troll articles." That's Presidential speak...
Althou' this is more promising https://www.nbr.co.nz/article/orion-...orset-b-201955
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Hmmm, "troll articles." That's Presidential speak...
Althou' this is more promising https://www.nbr.co.nz/article/orion-...orset-b-201955
Usually the insights in this type of situation are to fire the CEO and the Board, which may well be warranted for taking their eye off the ball that made this company successful prior to IPO!
In this case though, McRae has decided, as he is perfectly entitled to do as majority shareholder, to revert to pre-IPO responsibilities and sort out the mess. That sounds a bit like he's putting all the blame on the management that he himself put in place to run the business post-IPO! It also pre-supposes that he can facilitate the reversion to profit! If not they're a goner.
I agree, that this company has pretty much stuffed up the listing process, the subsequent management, the errant shareholder promises, the sales pipeline and the expense profile of the company. There's not a lot else they could screw up.
I don't agree though that firing McRae (which can't happen) or the Board is the right solution, however now that they are at the behest of the bank, it will only be successive wins, revenue growth, and cost cutting that will keep them afloat.
The risks are extreme. The rewards could also be extreme. The Porsche drivers who bought DIL in the depths of despair will be licking their chops at another potential windfall, albeit a few years of recovery that will necessarily follow.
Don't write off OHE just yet. They are bigger, generate more revenue, and are way more deeply embedded in their long term customers than their recent performance suggests.
I actually think McRae is the only person that could possibly bring OHE back to life. He's given himself 10 years to do that. A punt into the bottom of the SP, wherever that ends up, might be worth a decade of waiting. Sad though that it's devolved to being a bet on McRae, a mere punt, a bet, like lotto or the horses.
JMHO
BAA
Thanks for your thoughts Marilyn. I agree that Judgement day cometh. Banks are fair weather friends. If the bank committee thinks Mr Mcrae isn't following a sound pathway of light, he'll be shown the darkness pretty quickly.
Banks don't like their facilities being used as a form of quasi equity, he better raise some new equity quickly or...
I think he's done a truly appalling job of "managing" the resources investors entrusted him with but those that invested without any financial projections should perhaps ask themselves why they had such blind faith in one they didn't know ?
Excellent post Baa Baa. Investors have good reason to bleat like lambs lost from their mother, sorry mate, I couldn't help myself :D
Disc: I see no contrition or remorse for the tremendous destruction of others capital resources so wouldn't entrust him with a single dollar of mine.
Welding the scalpel...
http://www.stuff.co.nz/business/indu...t-orion-health
https://soundcloud.com/nbr-radio/ori...jobs-rd-budget - Ian McCrae commenting on NBR.
I wouldn't mind betting a couple of bob the bank told him to right size the company. Any way you slice and dice this thing its looks reactive not proactive and is a circa 10% reduction in head count really enough ?
I'd say you're almost certainly correct that now OHE is at the behest of their bank that the bank said strip out some costs!
It won't be enough in Toto though, to put the company back on a solid footing. If we assume an average of $100k salaries which isn't unreasonable in the IT sector, then 10% of 1200 staff = $12m of savings. It's a good start, but not enough.
OHE need to show confidence in the top line number as well, confidence that they have a solid revenue stream and a sales pipeline, and when they expect those will be converted to customers. They 'allude' to it by holding onto the statements of moving to profit in FY2017, but of course there is no evidence to support that.
At the heart of it is where it all started. OHE have pitiful reporting, leading up to the IPO and subsequently. No investor could have any confidence in OHE's future until they realise that 'disclosure' means exactly that! Disclose the numbers, front up to the shareholders with the facts, all the facts, and stop obfuscating the truth.
10% revenue growth and next year coud be profitable.
99.99% chance the bank instructed him to do it and agree 100% with the rest of your post too.
The question investors need to ask themselves is why does it most probably take an external party to give the CEO / major shareholder / directors prudent management instructions that are so obvious to "blind freddy" ? If management and directors have to rely on outside influence to tell them how to run the company in a prudent manner why would one trust them to manage your capital carefully going forward from here ?
Fall is relentless and with a C R on everyones mind its no wonder, where is the bottom better question what is the enterprize value ?
CR? Havnt they got a 50million loan facility?
Suppose it will depend on terms ect. Definitely keeping an eye on this one and buying one or two. Seems like some good value for the brave.