I'm with you @nerdag. I timed my purchases poorly (average price of around $10.50), but the central theme for me was the Aerospace and Defence portion of the business.

I don't like that Kees sold 24mil of shares before all of this news came out, but he is still a substantial shareholder. I also find it surprising that revenue has gone backwards while they are increasing manufacturing capacity by moving HQ, but this can be explained partially by your comments around market sentiment and motorsports.

If there is more insider selling I would seriously consider my position. For now I'm happy to wait a little longer and see what FY2026 looks like - and will probably purchase a bit over the coming days.

@Seymourbutts no idea who coach and Petey are but i think i get the message, you didnt mention that fh25 NPAT $3.2-3.7m vrs $9.4m pcp. as you say all the damage in OEM and a/mkt. OEM is a tough market dealing with large concentrated buyers that call the shots. they look to have axed a couple of programs w/o notice by the looks of it. this is a weak part of the biz IMO.

There is a call at 2pm in Brisbane time (3pm in Syd). i have a tracker position in this, not tracking too well after this! see what they say, second disappointment in a few months.

Thanks @Solvetheriddle, and agreed, there is plenty to dive and dig into - definitely worth pointing out the numbers.

The biggest kicker for me (unfortunately) is that this has and is eroding trust in management, I've also since been reminded that Kees sold shares earlier this year - not a good look. One could argue that he didn't anticipate this, regardless it doesn't pass a pub test IMO.

Aerospace and Defence is growing at a rate of knots (important to take one positive from this), which is great and is core to my thesis. But I'm still going to have to take a long hard look in the mirror for this one.

By the way, you're missing out if you haven't watched Remember the Titans (movie reference above) - one of the all time greats and arguably the greatest sports-movie ever.

One of Denzel's finest pieces of work.

Another reference: https://www.youtube.com/watch?v=megNGAc9_i8 - instead of 'football' substitute it for 'investing'.

Financial performance going backwards on nearly all metrics.

So much for the Trump trade.

"One of my cardinal rules—and these are all cardinal rules here—is that I will not own a stock when a CEO or a CFO leaves suddenly. I just sell it." – Jim Cramer, 'Real Money'. (I note PWH's CFO resigned 8th Oct - Happy Trails!)

Don't think he has left suddenly. He is serving his notice doing a handover and retiring

ok this is my analysis. the big surprise (to me) is the extent of the npat decline. note that is without any significant relocation costs, they come in the next half.

these numbers are made up to assess the delta in each segment and as a guess to what must have happened. i reconcile each segment to the total guided number.

i have both aftermarket and OEM falling to losses (or b/e) as the revenue disappears without the costs coming down yet. huge reduction in profits showing the nature of the fixed cost biz. We also have AD ramping up, so adding costs even as revenues expand, i suspect those short-term EV contracts were expected to cover the cost of the ramp-up. add to this the slower Motorsports and you get the ugly picture.

the next half will be messy with relocation costs of -$4.1m pbt, also we can expect costs taken out of OEM and aftermarket, but more ramp-up costs in AD, motor 2H seasonally better.

to me the lesson here is that businesses with high fixed costs suffer terribly when revenues decline, we know that and see that here. PWH shows it's a manufacturer with all the issues that brings.

my view is that it will take time to recover, as well as a new CFO coming on, so unlucky timing there, baptism of fire for her

long term you have the new factory and the returns on the AD spend in 2026/7? is the bull case.

ill wait for the interims.

Anyone got a take of the con call? Seems like whatever was said stopped the share price from imploding further.

The below was from a poster on the HC forum who listened in on the call.

My summary of the call:

-Motorsports for 2H25 and beyond to be strong

-A & D expecting significant production from FY26

-Huge efficiency gains from moving to Stapylton dropping directly to bottom line (helping margins to get back to 18%-20% by FY26)

-Material defence announcement imminent

-90% plus cash conversion 1H25 with slight net debt position by FY25

What are Cramer's other "cardinal" rules?

Noting that it has generally paid to do the inverse of what he suggests (he's a meme for that, and I believe there is an official "inverse Cramer" ETF too which performed very well in its heyday!).

Here are some: https://economictimes.indiatimes.com/markets/stocks/news/theres-always-a-bull-market-jim-cramers-25-lessons-to-grow-money-and-not-lose-it/mad-money/slideshow/76152517.cms

Rule No. 19: When the chiefs retreat, so should you

He feels when CEOs and CFOs of a company quit, it is usually an indication that something is wrong with the business. Although there are exceptions, but it is best to sell these stocks quickly as they may head for a downfall.

His book 'Confessions of a Street Addict' was actually quite an interesting read about what it was like to be a hedge fund manager during the 'Dot-com Boom' btw.

Jim Cramer seems to get lots of calls wrong too! And most of those rules everyone knows about - he didn't make them up. That's why I don't follow him that much.

Anyway back to PWR. I think it will drop out of the 300 so expect more volatility in the mid term.

Don't know about the defence contracts. Timing of those contracts can be longer than expected and which means there's the chance of revenue not meeting guidance

I've reduced some based on the update to chase a small tech I found on the US market that looks like a better opportunity. Maybe I can use that to make up for the loss?

Agree with the CEO and CFO point.

Though also agree Jim Cramer is wrong more than right.

PWR Trading Update.pdf

Here's a transcript from that PWH call yesterday - hopefully this link works

Thanks @Slomo just out of curiosity is the highlighting AI?

I've put this through ChatGPT with the simple prompt to summarise. It spat this out, which may be easier to read:

Overview:

• Pwr Holdings Ltd held a market update with their Managing Director, Kees Weel, addressing questions from analysts regarding the company's financial performance and outlook.
• The company confirmed that the first half of FY25 had lower-than-expected revenue, particularly in Original Equipment (OE) and aftermarket sectors, which would impact full-year results. However, they expect a stronger second half in sectors like aerospace, defense, motorsports, and energy, with positive long-term growth expected.

Key Points:

• Revenue Impact:
• OE and aftermarket revenue were lower than anticipated in FY25’s first half due to increased manufacturing costs (e.g., materials, energy) and reduced OEM contracts.
• Aerospace and defense sectors are projected to grow in the second half of FY25 and beyond, driven by new work orders and customer demand.
• Motorsport and aerospace are expected to experience stronger second-half performance.
• Headcount & Cost Management:
• Headcount increased by 33 employees, mainly focusing on aerospace, defense, cybersecurity, and quality assurance. The second half's headcount is expected to remain stable.
• Cost management is focused on labor, overtime, and maintaining a lean workforce aligned with the expected revenue.
• OEM Contracts:
• The company experienced setbacks in OEM contracts, with two canceled programs and one paused, totaling a loss of about $5.6 million in FY25 revenue. These contracts were short-term and will not affect FY26 or FY27 significantly.
• Financial Outlook:
• Operating cash flow is expected to convert well in the first half of FY25, with around 90% cash conversion. Net debt is anticipated by year-end but should remain manageable with good collections and expected cash flow improvements in the second half.
• Pwr Holdings' long-term target for NPAT margins remains around 18-20% by FY27-28.
• Motorsport and Aerospace:
• Motorsport revenues are traditionally skewed to the second half of the year, with new teams and car designs planned for 2026, which will increase demand for services. While the first half of FY25 was weaker than expected, the second half should be stronger due to timing and budget allocation.
• Aerospace and defense revenue will continue growing, but there’s minimal seasonality, and growth should ramp up in the latter half of FY25.

In summary, while the company faced challenges in the first half of FY25, especially in OE and aftermarket sectors, the medium- and long-term outlook remains positive with expected growth in aerospace, defense, and motorsports. The company is focused on managing costs, maintaining stable headcount, and continuing to drive growth in the second half of the year.

Had to separate it into 2 as the prompt was too long..

Here’s a summary of the key points discussed in the meeting:

1. Aerospace & Defense Pipeline: The company is confident in the progress of its aerospace and defense projects, particularly in terms of certification and production timelines. Specific partners, such as Jiobit and Affirm-ahf, are advancing well, with production expected to ramp up in 2026 and beyond.
2. Headcount and Staffing: The company added 31 new positions to support growth, especially in aerospace and defense, focusing on roles in quality, cybersecurity, and risk management. However, they anticipate a slowdown in hiring for the second half of the year, with plans to catch up in 2026 as projects ramp up.
3. R&D Investment: The company is heavily investing in R&D, with over 40 projects underway, focusing on new technologies for sectors such as motorsport and aerospace. They spend around $10 million annually on R&D, with support from government grants.
4. Technology Transfer: Technologies developed in Formula 1 motorsport are being transferred to aerospace and road car applications, particularly in the areas of hybrid engine specs and battery technology.
5. Contract Cancellations: Two contracts were canceled, one in the U.S. and one in Germany, mainly due to market conditions and overestimations in customer demand. However, the company emphasized that they preferred cancellations over chasing bad debts.
6. Margin Expectations: The company is optimistic about improving its margins to the 18-20% range in 2026 and beyond. They are focused on efficiency gains from their new factory and technology automation, which should help reduce costs and improve profitability.
7. Order Book and Production: There are no major changes to the order book, and they expect significant aerospace and defense contracts to start materializing by the end of the year.
8. Facility Relocation: The move to the new facility is on track, with no delays anticipated. The company expects to be fully operational by the end of August next year.

Overall, the company is focused on ramping up for growth, especially in aerospace, defense, and technology, with a focus on R&D, efficiency, and strategic staffing. They are confident in their long-term outlook despite some short-term challenges.

Disc: Held IRL and on Strawman.

Correct @Mujo, AI generated sentiment highlights

Thanks! I'd never seen it in action.

I do find it intriguing the price is still holding well.

I guess everyone was buying on anticipating some big news in the aerospace or defence on the horizon after the AGM although it has been more than a month and no news so far.