I would be more conservative to say the cash backing and a circa 2c price is probably a safer margin. Not withstanding my inability to forecast the next half year with the lack of work, I would say we would begin to cut into cash and profit. It won't be mind boggling (I'd hope) and lets face it - this many years into the post boom bust and having profitability and cash: we're probably going to ride this out before it turns back up.
But without future contracts and work being announced I don't see much catalysts for a price up. The question is if days like yesterday continue: illiquid stock, bored investor wanting a quick gain cashing out as nothing moving.
If this goes to sub 2c I would be interested to see how this goes. Just a few more jobs or contract wins could keep them in neutral for the year ahead, let alone making cash. Am hoping the housing authority work goes ahead, which combined with the townhouses secures a better than nothing pipeline for the next 2 years. Then await news on the mining side. The o/s tendering my only concern is how likely costs and work will deviate from the norm that they're used to running back in Aus? Hopefully not uncharted territory.
RDG Price at posting:
2.2¢ Sentiment: Hold Disclosure: Held
