TBL 0.00% 16.0¢ tambla limited

I've had COM on my watchlist for a while and have been meaning...

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    I've had COM on my watchlist for a while and have been meaning to go over this report which at first glance didn't look too bad. However, looking a bit deeper it is actually quite disappointing and organic growth seems to have completely disappeared with acquisitions (funded by diluting existing shareholders) has provided the top line growth.

    The year on year figures that are reported look healthy, but it is completely due to a very strong 1H (which rightly saw the SP in a strong uptrend to its 2.7c peak), because the 2H saw decline in most areas. Even in the Director's report this largely glossed over:

    "Whilst ComOps delivered 31% growth in sales during 2015 due to the impact of the full year of eTivity trading and the Directors are confident that ComOps can deliver similar growth in 2016, the historic low level of new sales has resulted in the conservative decision to reduce the carrying value of goodwill by $2 million."

    Geez, as confident as management may be for a 2016 turnaround, it's a tough investment thesis to put money in a company right now that is telling you that they are suffering from historically low levels of new sales.

    From the 1H, NPAT fell from $46k to ($3.8m). This was largely due to the impairments to goodwill, but even EBITDA fell from ($114k) to ($810k). They did manage to increase operating cash flow as the new acquisitions provide for more consistent receipts, but remove R&D rebates and cash is still being burned.

    I think COM has a strong future, they appear to now have a strong range of products operating across varied industries with blue chip clients, but we need to see it move to the bottom line without having to tap shareholders on the shoulder every few months for working capital or an acquisition.
 
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Currently unlisted public company.

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