Investment Matters

Company news: Cardno

Cardno, in which you have a small holding, put out a trading update showing that it will not hit the profit guidance put in place for FY-16 earlier in the year. Additionally, as part of the efforts of the new board (being led now by private equity firm, Crescent Capital) they are also considering whether Cardno is appropriately capitalised (given its current level of earnings), or whether a further equity raising will be required.  If it is, Crescent will take up its portion of any raise.

We remain heartened that revenue is holding together well, and this lays a foundation for Cardno to head back towards longer term EBITDA margins of >10% versus 5% currently. This will see profit improve markedly in future years.

For First Samuel clients we see the Cardno journey very much like that which we had with Energy Developments & Pacific Brands, each of which turned out to be a stunningly successful investment after early set-backs.