I talked about ECS and Multi-chem, IT distributors cum system integrators or after sales providers that could have issues due to them not being stockist.
I realize I was late in that they reported their interim financial report.
You can view report here.
This small stock is really seriously thinly traded. The spread is damn wide.
- Revenue and gross profit growth was stagnating, but COGS outpaced revenue
- Selling and distribution costs was inline
- The main bugbear was the Administrative expenses. 44% increase. The main reason I feel causing this 2 quarters of profitability issues
- Operating Cash Flow Before working capital is strong. Half year cash flow is able to fulfill the full year dividend of 8%. Factoring in working capital and income tax and the free cash flow becomes negative
- Beauty of this business is no need for much capex. This balance off with the investments in administrative expenses
- ...