Finance > Shares

KME

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galumay:
FY 2021, Well KME did turn things around with a much better second half, cash flow also quite strong considering the cost of firing up the online tutoring due to covid.

galumay:
Another solid half, very happy with progress.

galumay:
FY 2022, a bit softer in the 2nd half, still reasonable result. no real surprises, I think they have done ok considering the potential of the impacts over the last couple of years. One thing I couldn't work out was the drop in NTA.






The related party loans were also a concern, loans to directors to exercise their options as they were in a closed trading period and unable to sell shares to fund the exercise of the options.

Brett, the CFO is ringing me tomorrow so I will clear up the NTA & ask these questions about the loans,

So i take it the black out period was in force because the options expired on 31/12/21 and the closed period in the share trading policy being the black out period, came into force on the 31/12/21 and applied until 22/02/22 when the Half Year Report was released?

Given the notice of Application for quotation of securities was issued on 29/12/21, was this not specifically prior to the commencement of the blackout or closed period?

Accepting the blackout period, why were the loans a 5 year term and why 2.59%, doesnt pass the sniff test of being �market interest rate� and it looks like in effect the company borrowed at 2.96% to fund the loans to directors at a discount. It seems the company borrowings were variable and the loans to directors, fixed, that is also problematic.

galumay:
Very poor result for KME this H1 2023, basically another business paying a dividend out of borrowings. Really poor capital allocation. I am conflicted about continuing to hold this business, red flags for the last couple of reports on various grounds. I will sit it out for a bit longer but need to see some better management outcomes in the next 12 months.

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