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  1. #1
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    Default EVS - Envirosuite (was PEH)

    Decided to start a new thread for this one, although it has had a mention a while back on the micro-cap thread.

    Very illiquid, so read no further if this is an issue!

    Market cap only $4.7m at last traded price of 4.8cps, although current bid at 5cps after positive 4C today and offer at 6.2cps. Has recorded $12.2m in cash receipts for FY and $1.2m in op cashflow, with majority of that in the last quarter.

    The company is engaged in environmental consulting, listed 2008 and with significant board and management changes in 2012 setting it up for a move into profit. The recent May presentation gives a good background, so I won't rehash it here.

    My only reservation is that there is convertible note borrowing from an Executive Director, Robin Ormerod, which is significant ($1.8m) and, more concerningly, the terms of this note were re-negotiated a year in advance of expiry with an announcement buried in the Christmas-New Year break which markedly improved the terms of these notes for Mr Ormerod in exchange for extension to June 2017. The terms allow him to convert the notes at 3 month VWAP prior to signing of the loan agreement - which according to my enquiry to the company was 3.37cps, so equivalent to about 53.4m shares or about 54% of current equity. There are a couple of safeguards, including the company's ability to repurchase and prevention of trading in converted shares for more than 10% of issued capital in the first 4 years of the agreement (i.e. beyond the life of the loan), so it is not completely one-sided.

    PEH appears likely to report a profit for FY13, although second half will likely be lower than first half ($700k) due to seasonal slow-down of consulting works in January, but could trigger some interest. Acquisition activity is expected to form part of future growth.
    Last edited by Lizard; 19-01-2017 at 05:44 AM. Reason: Change of name

  2. #2
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    Default

    Creeping up a little waiting for result with last trade and bid at 6.5cps... and offer at $1 May need some keener sellers than that before it will trade.

    Volume has been so thin, that there have been only a few $k through since last post - accumulating for the result is probably not too realistic here.

  3. #3
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    Default

    Strong result out with strong commentary. If they weren't so illiquid, I'd try and pick up some more! Buyers at 6.8cps, sellers at 7.5cps. I value at 12-14cps, but with a caution re possible conversion of the convertible note.

  4. #4
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    Default

    Has pushed up to 8.5cps, so looks firmly on the recovery path now. Plenty of upside and a few more available around these prices, so may be possible to get a few around here.

  5. #5
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    Default

    Offer price has slipped back to 7.5cps offer and very little on the bid. Flagging the final stages of an acquisition in todays AGM speech, so suspect they are on the hunt for capital to finish the deal. Will be interesting to see what the quarterly shows in terms of start to the current financial year.

  6. #6
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    Default

    Quarterly looked solid, with positive op cashflows and good receipts (although not as strong as last quarter). Market cap of $7.7m is low given they have nearly $1m in cash now and improving cash flows.

    Given the lack of liquidity, I think it is worth having a few now, with an eye to the likelihood of an spp should their acquisition plans require cash.

  7. #7
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    Presentation out as they try to rally investor support for a potential acquisition:
    http://www.asx.com.au/asxpdf/2013110...ygxlbxcvt7.pdf

    Reads well.

  8. #8
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    Default

    Thanks lizard ;picked up an initial stake today.

  9. #9
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    Default

    Quote Originally Posted by Joshuatree View Post
    Thanks lizard ;picked up an initial stake today.
    I've picked up a few recently - looking very cheap on a P/E basis. $1m NPAT last year and market cap is only $5.5m! PE of 5.5? This is cheap. Very illiquid, tightly-held stock (top 20 accounts for 67% of th ecompany, and I don't think they are going anywere). Very bullish presentation - positioned for growth and an exciting future. Someone obviosuly needs some cash - hence the recent sell-down. I've been happy to grab some (IMHO) undervalued shares - couldn't resist!

  10. #10
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    Great contract win announced today. Just the first phase of this 3.5 year deal represents more revenue than any of their other deals since listing on the ASX! Big scale win, on the back of announcing Bill Haycock joining the company as General Manager, Business Development. Bill is a big player in the environmental services sector and the former president of the Environment Institute of Australia and New Zealand (EIANZ). Fingers crossed for growing revenues - this massive win announced today will certainly help beef up the balance sheet! Still only a $6m market cap (was up around $8m recently but has eased back).

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