Corporate: WiseTech investor Michael Gregg’s latest project is… Oliver’s Real Foods
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Of all the companies you would expect a tech investor and director to buy into, a healthy fast food chain is unlikely to be on your list.
But WiseTech’s Michael Gregg has bought a 6.82 per cent stake in Oliver’s Real Foods (ASX: OLI). He paid just over $700,000 for the privilege.
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Gregg spent the first 11 years of his career in retail then did managerial stints at TNT and Link Telecommunications. Between 1995 and 2005 he was managing director of medical software provider HCN until its acquisition.
Combining his experiences in software and logistics, he invested in WiseTech in January 2006. He is the fifth largest shareholder, owning 4.35 per cent of the company.
Since listing at $3.35 it is now above $32 – a gain of over 800 per cent and his stake would be worth over $400 million.
It is nonetheless a curious buy considering he has launched a $50 million private equity fund for software startups. Even more puzzling considering Olivers’ situation. After being plagued by losses for many months, the company declared things had turned around.
But investors panicked this was not the case after last Friday’s quarterly – it showed a net cash deficit of $331,000. But on Monday morning, it announced earnings were $161,000 and said the deficit reflected the hangover of the overhead reduction program.
It admitted cash reserves would reach its lowest point in August and Jason Gunn lent the company money.
While Monday’s announcement did not provide the figure, a substantial holder notice revealed he sold $100,641 in shares, presumably for the loan.
But the company anticipates a break-even or better result would occur in the first quarter of 2020.
In the wash up of quarterly season the ASX inquires of companies it thinks will go bust unless it changes course. The first to be investigated was Cellmid (ASX: CDY). It had cash reserves of $3 million and anticipated $2.56 million outflows next quarter. The company said its cash outflow would be at a reduced rate and revenues would stem the affect. It explicitly told the ASX: “The 4C does not have an appropriate section allocated to provide for cash inflows.” It anticipated operational profitability this financial year.
Despite recording a $23 million profit before tax, AVJennings (ASX: AVJ) has fallen 10 per cent today. This is because it was lower than the company and investors anticipated. It asserted the worst was behind them noting the NSW and federal election were over and the lending environment was improving.
VMoto (ASX: VMT) provided a market update this morning and shareholders sent the stock down 14 per cent. It sold 3,115 units – a 20 per cent decline on the last quarter. The company reminded shareholders of its distribution agreements signed this quarter and its order book had nearly doubled since last quarter – to 4,452. It said it was confident it could “consolidate its position as a leading electric two-wheel vehicle manufacturer and provider”.