ASX:PRO
Prophecy International Holdings Ltd
Investment Summary
The fund managers believe that Prophecy International Holdings Ltd. (PRO) is currently facing significant challenges, particularly related to a recent revelation about overstating its annualized recurring revenue (ARR). This restatement, which reduced ARR by $3.4 million, has raised concerns about the adequacy of the company's finance function, especially since there is no CFO currently in place. In their opinion, while the company has previously shown resilience, the combination of weak first-quarter results, escalating hosting costs, and issues with management focus on profitability over revenue growth has strained investor confidence. Despite these challenges, the fund managers have maintained a position in the company, although they have reduced their weighting and anticipate it will take time to restore shareholder confidence.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Manager
Mereweather Capital
Date
30 Nov 2024
Price
$0.51
Medium
Monthly Report
Commentary
Mereweather Capital Inception Fund continues to hold its position in Prophecy International (PRO) despite a disappointing update regarding overstated annualized recurring revenue (ARR) and weak first-quarter performance. ARR was adjusted down by $3.4 million, highlighting issues in the company’s reporting system. Management committed to improving finance functions and reporting. Despite these setbacks and shareholder concerns, including increased operating costs and profitability issues, the fund maintains its position, albeit at a reduced weighting due to the ongoing business challenges and management credibility concerns.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.