Yahoo Finance
Filing
2. Management
7.Links
Filing
Apr. 9, 2021
Dec. 31, 2020 Data, Year-end Sept. 30.
Price: $0.50. Shares :28.7m, Cap: $14m.
Dec. 31, 2020 Data, Year-end Sept. 30.
Price: $0.50. Shares :28.7m, Cap: $14m.
1.Business
(1) History
(1) History
The company was originally called WESA Group Inc. It was founded in 1976 specializes in water sanitation for the mining industry, government, etc. In 2012, it IPOed through a reverse takeover.
The company didn't do well in 2013 and 2014. But becoming profitable in 2015. Roughly every year it generates around 1m in EBITDA but spent close to 500k in interest payment. Real income probably just around 500k.
In 2020, it generated 2.6m in operating cash which includes 1.2m in CEWS from the government. It spent around 500k in leasing and CapX. Its real earning is around 800k. It also generated 1.1m from selling its building.
(2) Major business
Currently, its business is mostly contract-based. It has 4 sectors including industry, government, military, and mining. Each sector counts revenue from 20% to 30%.
(3) Industry
2. Management
Roger Woeller: He was the CEO of the company since 2000. Retired at the end of 2017. He held 1.6m(6.4%) shares at the time of IPO(2012). At the time of his retirement, he holds around 1.9m shares. Also, the company paid him 280k shares upon his retirement. He might hold 2.2m now.
Scott MacFabe: CEO since early 2018. Previously he was working in the US in the same industry for many years. He is looking for an opportunity to relocated to Canada and reached out to the company when Roger Woeller is seeking retirement. Don't know much about his management history. Scott holds 500k options at $0.24/share.
3. Financial data
Notes: Debt and cash
The company was able to reduce its debt significantly in recent years. Now its debt is around 3.7m and has cash of 2.6m. The debt is up for renewal later this year. I think it could get a much better rate or be paid down quite a bit.
The company was able to reduce its debt significantly in recent years. Now its debt is around 3.7m and has cash of 2.6m. The debt is up for renewal later this year. I think it could get a much better rate or be paid down quite a bit.
Notes: Share information
At the time of IPO in 2012, the company has 25m shares outstanding. Now it set around 28.7m shares. Didn't changed that much.
Currently, it has around 1m options outstanding at $0.24/share.
4. Valuation and comments
(1) The company has been profitable since 2015. However, it is until 2019 it has started to generate cash from the operation which is coincident with MacFabe became the new CEO. Mainly through the reduction of account receivables.
(1) The company has been profitable since 2015. However, it is until 2019 it has started to generate cash from the operation which is coincident with MacFabe became the new CEO. Mainly through the reduction of account receivables.
(2) It seems to be able to generate around $1m real income which makes the $14m cap a quite reasonable price. The business is performing quite well lately. If the trend continues, it might become pretty attractive.
5. Risk
(1) The company's revenue is contract-based. It is hard to tell how the business will perform in the future.
(1) The company's revenue is contract-based. It is hard to tell how the business will perform in the future.
(2) It is profitable for many years but only generated cash in the last 2 years. Hard to tell whether this will continue.
(3) The current profitability might also not continue.
6. Conclusion
The company seems managed well lately. However, there seems very little growth potential. Currently, the share price is acceptable but not really cheap.
7.Links
