Originally Posted by
Baa_Baa
No, no idea why it won't. I think you're right, it's finally starting to really work.
Basically this was an exciting company especially the VML to PLX days but they got into trouble with the premier McD's contract, even though it is huge, turns out it wasn't making money. They didn't have much else going for them, a few smaller customers, tiny by comparison. But they did/do have amazing tech and in hindsight the TASK team saw this and the reverse takeover threw a lifeline. Otherwise, I think PLX would've gone bust or be bought by McD's at pennies on the $.
Th PLX management took a bath and the key directors as well. Again with hindsight that not only makes sense, but with the new management and board, it's almost completed the transformation and is obviously going from strength to strength. It's even showing up in the financials. It's not just the passion of the new directors/management I like, it's the practicality no-nonsense get on with the business, make it work! Perhaps not surprising as they have a great deal invested in making this work, but refreshing nevertheless.
The combined PLX/TASK tech is really a leading end-to-end solution in their market. Since then it's retained the McD's 9% shareholding with rights to extend, secured a 5 year McD's contract profitably, and extended a whole lot of existing TASK customers contracts and brought on a few more contracts, like Pita Pit (which could go global as well). Some premier customers as well, like Starbucks. They've abandoned the fringe sectors like grocery, and are basically focusing on what TASK does well, and PLX augments, inventory -> kitchen -> retail QSR.
So the cash is flowing in like it never has before (it's only been a few months), and the turnaround is almost complete already! I'd expect a flat NPAT maybe negligible loss for the past FY based on the EBITDA turnaround, and a boomer current FY. There's plenty of cash at bank so expect more acquisitions to come, hopefully EPS accretive.
Most importantly imo is in the current market climate, that they go to profitable, maybe at the expense of growth. No ones buying into loss making tech companies. I think they get that.
IMO the only real risk is that they have such a low market cap, they'll be attractive to an acquisition, and the Houdens have about 37% of the company, and on top of the windfall to them from the reverse takeover, they could stand to gain a lot more from an attractive takeover buying them out. There's no sign of that so far, so I'd consider the risk to be negligible, but it is a risk.