Agreed. The issue is cash generation in the last half yearly was light, and if it continues to degrade fixed costs are likely to begin eroding cash in the bank. That said for a going concern they appear to have enough cash to last what one would expect would be a reasonable time for a business to get into gear i.e. a year or two. IF they fail to land any work in that sort of time then obviously the business as a whole has lost it's operational way.
I don't think it'll get to that as the company's management seems to be looking left right and centre for work: given now they're stretching from residential townhouses all the way to starting up overseas. The only issue is these I assume have a longer lead in time and only a pickup in the mining cycle locally here could see a shorter lead time work pop in.
Probably no catalyst for a rerate in the short term this year... but will keep an eye out.
RDG Price at posting:
2.4¢ Sentiment: Hold Disclosure: Held
