The candidate could come from Mars, but I'm feeling lucky, just sent out my application:D
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Ha. Looks like a tough job to me too. I haven't bought any WDT shares since the rights issue, but I can't stop thinking that a company who increases sales 50% each year MUST make a profit at some point! It appears that they are actually making making money on the motors now (10% gross). I wonder if the deal they are trying to do with the major customer is closer to the original concept where the company charged a royalty for other manufacturers to make the WDT motors?
Finally got around to a closer look at the HY result, following initial disregard on the basis of cash-burn and low gross margin.
There are still some good things going on here. First half sales were a little higher than I'd expected, although more than off-set by lower margins (even allowing for restructuring costs). Forecasts for the second half include a necessary reduction in operating costs and significant reduction in inventory. Assuming the inventory reduction is achieved through sales rather than write-downs, and looking for margin improvement to 12-14%, along with further sales increases, this could see cash-burn in the second half reduced to under $1m.
Continuing patterns into 1H12, but with only minor further reductions in operating costs and reliant on further margin increases, cash-burn is still likely to be in the $2-$3m range (no inventory reductions and probable overall increase in working capital requirements again). So, based on this, would be stretched to get through with no further cash requirement - although the amounts required might be relatively smaller than in the past. Increasing gross margin to at least the 20% level remains the toughest challenge to crack, especially while maintaining the rate of sales growth.
However, in the meantime, the outcomes of the Ziehl-Abegg discussions are likely to be crucial to cash position. Possible outcomes include improved margins, but lower sales, reduced inventory freeing up cash and perhaps a technology transfer payment? Certainly, from the Ziehl-Abegg web-site, they look to be pushing their high-efficiency fan technology hard and achieving significant sales success. Any announcements regarding the outcome of discussions would be worth reading closely.
Overall, I would say WDT is still on watch and wait. If they can implement the items they've committed to this half, then they may start to look interesting for 2012, but, even so, profitability seems unlikely before 2013. Another capital raising in 9 months time can not be ruled out, although the scale of it may be reduced from past requirements. And the "risk" for long-term holders remains that a takeover will be mounted around the time shareholders get bored with waiting...
WDTL.com has an updated distributor. The following are new:
Distributor in Aussi (their website would suggest this happened late last year/early this year), one in NZ, one in the UK and one in the US.
Based on my memory they have dumped one of their US distributors and appointed a replacement. That makes for three in the US (which doesn't seem like very many)
WDT price jump to 28cps after having seen a slow build-up around 20cps in recent days.
Not much volume here, mind-you, but then there is only one visible parcel on the sell right now...
... restart your motor?
Is it Raymond Thomson (a director) pushing up the price 50% in one week? A wonder what he knows that we don't? Plenty I would suggest...good or bad. Pretty easy to guess which way the news is if it is him. Interesting times ahead perhaps?
I don't know that we can blame a director yet. He only disclosed buying as far as 22cps on the 3rd - the day it ran to 28, and quite a small parcel at that.
I was looking at depth that day, and it looked like someone came in with a couple of 50k stepped orders over top of him. Then maybe another small buyer or two jumped the gap. I am thinking it looks like a small conviction buy by a fund that may have triggered a couple of small retail buys across the spread. Maybe Winner or Belg ;). Very little on offer at present.
Doesn't seem likely to be on rumours, as directors would hardly be buying if there was potential "insider" knowledge.
Not enough volume seemingly being sought to suggest anyone building a possible takeover stake, I would have thought.
Depth looks pretty thin on the buy side and a few sellers willing to come out at 30cps+, so will see what happens next week and whether the buying holds up and comes from off-screen. Could be first turn-around we've seen in a while, though might need to wait until it forms a new base to accumulate from - (I'm never fast enough to grab any volume from stocks on the move, without finding I've caught the 6-month peak...).
I have followed blindly WDT for a long time.30cps makes me think its not heading out the back door but it is really is 1.5cps from before the split.love to here any thoughts on wdt i,m still clinging on the old ceo,s words.it would be nice to get some good news