DGL - DGL Group

[Rawz]

fy24 results were out on friday. https://stocknessmonster.com/announc....asx-3A649557/

ive just had a read. Not for me. 3rd year in a row of declining profits. negative free cash flow.
FY24H2 is down on FY23H2 uEBITDA and uEBIT.. appears the trend is continuing.
No guidance given.

Debt is manageable at <2x underlying EBITDA. Usually i like to look at D to D+E but there are a lot of intangibles on the balance sheet so don't trust that ratio in this case.

Looks cheap but maybe its a value trap?

thoughts?

[Perky]

I’m unsure…so my holding is small and bought recently @0.53. It’s a small cap speculative hold for me.

Hard to read with all the roll ups of additional businesses in last few years and industrial market a bit flat to declining in oz at present as economy slows.

However reasonable p/e and asset backing.

Im thinking it’s going nowhere in a hurry short term but once economy grows it could rerate quickly.
Provides an essential industrial service and could also get takeover interest from something like INEOS or other bigger player in this space.

Thats my investment thesis.

[percy]

I have only had a quick read.
Strategy appears to be on track.
Current assets $153,073 far exceed current liabilities of $82,221.
Cash flow from operations was $37,337.
Net assets of $341,959 supported Total assets of $605,643 giving an equity ratio of 56.46%
Deducting intangibles of $145,562 brings the equity ratio down to 32.42%.

[winner69]

Comparing F24 to F23

Profit margin down from 3.6% of sales to 3.0%
Asset Turnover down from 0.82 to 0.77
Assets to equity up from 1.73 to 1,77

Put all together and ROE fell from 5.2% to 4.1%

Needs to sell more and improve margins

[usenet]

Value trap, operates in low margin industry with high regulations, meaning there isn't much money in this type of business
most of your money probably spent on staffs and depreciation to keep the business just ticking along.

cash flow is also very weak so they taking on debt to sustain the image of business expansion to hide the fact their organic business is going backward.

dead beat all around of a business and their asset backing is also questionable, I wouldn't invest in a business just for asset backing.
if you don't have a strong balance sheet the market going to keep you in the dog dent

[Balance]

Comparing F24 to F23

Profit margin down from 3.6% of sales to 3.0%
Asset Turnover down from 0.82 to 0.77
Assets to equity up from 1.73 to 1,77

Put all together and ROE fell from 5.2% to 4.1%

Needs to sell more and improve margins

More revenue, less profit and negative cash flow.

Looking like a recipe for disaster!

How much market cap loss has Simon Whimp presided over since he decided to look for Nadia’s cleavage?

[stoploss]

More revenue, less profit and negative cash flow.

Looking like a recipe for disaster!

How much market cap loss has Simon Whimp presided over since he decided to look for Nadia’s cleavage?

Is his brother raising capital to prop it up ?
https://www.chancevoight.com/become-a-shareholder