Vysarn Limited

ASX:VYS

Vysarn Limited

ASX:VYS
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$0.430 (+3.6%)
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#18
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21
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Reports (4) My Report Forum Investors
Forum Topics VYS VYS 2024 AGM

Pinned straw:
Bear77
Added 4 weeks ago

Fri 22-Nov-2024: The market has sold down Vysarn (VYS) by as much as -36.8% today - earlier - their low point today was 27.5 cps, -36.8% below yesterday's 43.5 cps close. They've recovered to 40.5 cps as I type this, so "only" down -6.9% from yesterday which is a LOT better than -36.8%.

The share price rollercoaster today appears to be due to whatever was said at the AGM plus their outlook statement on slide 8 of their AGM Presentation, and specifically this:

VYSARN ANTICPATES SUSTAINED EARNINGS GROWTH IN FY25

  • 1HFY25: EBT anticipated to be below 2HFY24 following ongoing conservatism within the WA resources sector as a result of the broader global economic and political environment, and consequential uncertainty in commodity prices.
  • 2HFY25: FY25 EBT is expected to be materially skewed to 2HFY25 subject to a combination of the realisation of latent demand in the WA resource sector and the acquisition completion of Waste Water Services (WWS) and CMP Consulting Group (CMP) (subject to completing CMP). The anticipated step change in the 2HFY25 earnings run rate has the potential to provide the foundation for further earnings growth looking forward to FY26. 


I need to do some more work on understanding management, but they're either being overly cautious and trying to underpromise, or putting lipstick on a pig, or something in-between.

For me, the most concerning part of that is: "...has the potential to provide the foundation for further earnings growth looking forward to FY26."

That's a "nothing-burger" if ever I heard one.

It's not exactly a positive outlook guidance statement when you are simply saying that there is "potential" to provide a "foundation" for further earnings growth. You would bloody well hope so. EVERY business should have that, or else why are they even in business?

I have a very small position in Vysarn in one real-money portfolio which I bought during the past week just to make me focus on the company more and do further research, and I added some here on SM as well. I reckon I'm going to sell them today, because on the face of it, it seems that serious further profit growth is dependent on too many things going right for them, and they have just made a couple of acquisitions that they need to bed down at the same time.

I like their water exposure on multiple levels, however for the next 6 to 12 months I believe there are better opportunities than Vysarn, based on that forward guidance.
edgescape
Added 4 weeks ago

The macro is going to be bad for all Iron ore miners.

Except for Josh Pitt's RHI and their buying of Moose pasture in Broken Hill and South Australia. Can't believe it's up again today

I would also argue it will be bad for any service company exposed to mining.

Looks like a fat fingered trade by Regal.

Might be a good time to accumulate. My buy got triggered

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TKQLD
Added 4 weeks ago

I think the initial market reaction seems overdone given the company’s track record, long term water opportunity and management’s conservative history when it comes to outlook. There was a similar reaction albeit not as severe in price terms to an earlier announcement.

There are, however, reasons for caution. The integration of WWS and CMP in particular is likely to take time and there will be associated costs no doubt. I don’t know how complex this will turn out to be but it is essential for expansion of geographical footprint and services.

The near term earnings uncertainty is also not going to please the market with vague future guidance. I can definitely see the case for avoiding Vysarn now if you see better short term opportunities and want to avoid the integration risk and maybe cyclical headwinds. In which case one can re-enter once these clouds have cleared. What the share price is then is of course hard to predict.

I’m still a happy holder and am in it for the long term. Management has so far had a good track record and I’d certainly give them some rope. I’d be interested to hear from anyone who was present over in WA on the day though what the mood was like and if there were other things being discussed.

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