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.