Originally had this little compay as one of my undervalued pick for FY22, but some recent developments have undermined my confidence in the managment.
FIrst, the ASX announcement of 16 July 2021 left me with more questions that what the positive headline suggested. In particular, the company had muddled the water with the use of ARR and CRR. To the company's CFO credit, he did get back to me very quickly when I made a query.
Second, the 4C for the June quarter of FY21 was pretty much released to the market near the end of the annoucenment period. Not to my suprise, it wasn't rosey and showed a pretty substantial continual net cash outflow.
My concern with the RCW management really comes down to the fact that the good news was announced to the market not too long before the negative (in my opinion) announcement.
In my view, both announcements should really be released as one single announcement as to provide all shareholders with the full context.
Maybe I am a little too harsh on the management as it is still a company that only listed on the ASX and may not therefore fully appreciate the important of open communication with shareholders. However, the silence that followed my follow up query on this matter is concerning to me.
Given the right circumstances (improved shareholder engagement and new enterprise wins), I still think than RCW is worth much higher than the current share price.
However, my loss of faith in management and belief that they would need to undertake a capital raise soon to replenish their coffees has led me to reduce my exposure to RCW in recent days.
