Disclaimer: I own shares of Rave Restaurant Group and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• Solid Q3 Operations: Total revenues grew 8.7% YoY. Pizza Inn LFL sales increased 2.3%, overcoming an estimated 3.3% adverse weather impact in January.

• Fortress Balance Sheet: RAVE’s net cash position grew to $12m with zero financial debt.

• Impending Growth Inflection: While the growth rate to warrant a rerating is not yet there, there are strong signals now that by next year, the growth rate will have accelerated meaningfully.

• Valuation: The business continues to be highly cash-generative, and on a TTM basis, the FCF is undemanding but, admittedly, also not in deep value territory.

Introduction

In my previous coverage of RAVE Restaurant Group ($RAVE), I laid out the thesis of a classic 'GoodCo vs. BadCo' dynamic: a safe, cash-generative core brand (Pizza Inn) masked by the overhang of a declining legacy segment (Pie Five) and years of underperformance. This week’s Q3 fiscal 2026 results confirm that this setup is not only intact but moving towards an inflection point. While headline metrics reflect the steady, incremental progress, peeling back the layers reveals something more compelling: the core Pizza Inn Buffet segment is on the verge of significant unit growth. With a fortress balance sheet protecting the downside and new units in the pipeline, RAVE’s perception by the market could be shifting. In this update, my third post for the day, I break down the Q3 financials, formulate my run-rate cash flow expectations, and explain why the market may soon come to re-rate RAVE's earning power.

For reference and context, please see my prior article

Materials Used

• Earnings Press Release

• 10-Q

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Disclaimer: I own shares of Global Crossing Airlines and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• Profitability Inflection: Q1 revenue grew 15% YoY, driving a doubling of Operating Income ($6.1m) and EBITDA ($10.8m) despite fewer net aircraft available.

• Valuation: Shares trade at a severely discounted ~2.2x forward EV/EBITDAR and a meaningful underlying levered free cash flow yield. Galloway Capital recently increased its stake to 8.1% and publicly suggested significant rerating potential.

• Fleet Expansion: Guided fleet additions later in the year set the stage for a significant annualized EBITDAR uplift.

• The Catch (Liquidity): The adjusted current ratio deteriorated and is concerningly low. As analyzed before, the company relies on a negative cash conversion cycle, meaning flawless operational execution is required to service its hefty debt and lease burden. Sustainably profitable operations are in sight, but the margin for operational error remains razor-thin.

Introduction

Transitioning from a cash-burning startup to a mature, sustainably profitable enterprise is one of the hardest feats and, ultimately, very rewarding. For Global Crossing Airlines, the Q1 2026 results suggest this inflection point is arriving.

The company delivered an impressive doubling of operating income and EBITDA, proving that the operating leverage inherent in their platform is beginning to yield tangible results. However, scaling an airline is capital-intensive even when relying on leases, and the company continues to walk a tightrope. Beneath the top-line growth and expanding margins lies a heavily levered balance sheet and a highly negative cash conversion cycle. Reassuringly, the company has a track record of a deeply negative free cash conversion cycle, in particular when netting upfront payment and deposits, accrued expenses, and deducting prepaid expenses.

In this update, I analyze the Q1 financials, examine the free cash flow, evaluate the company’s fleet expansion, and discuss whether the current, heavily discounted valuation properly prices in the liquidity risks. For reference and context, my prior article:

To avoid ambiguity: this post is in $=USD.

Materials Used

• Press Release

• Form 10-Q

• Earnings Call Transcript

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Disclaimer: I own shares of Diversified Energy and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• Operational Resilience Hidden by GAAP: Diversified Energy reported a $161m net loss, but this was heavily distorted by $398m in non-cash derivative bookkeeping. Underlying operational cash flow remains robust.

• Masterclass in Structuring: The $1.18b Camino acquisition utilizes a highly accretive Special Purpose Vehicle (SPV) with Carlyle. DEC secures a 40% stake and 100% of the undeveloped acreage for just $210m in cash, representing a highly leveraged equity return without diluting shareholders.

• Improving Balance Sheet: Despite a messy “current ratio” on paper, net debt shrank by $74m during the quarter, while the company returned $94m to shareholders, and the borrowing base was expanded to $900m.

• Valuation remains compelling: Adjusting for working capital and growth capital expenditures, the company trades at a conservative ~26% guided levered free cash flow yield and sub-$20k per flowing barrel of oil equivalent.

Introduction

This week is busy with earnings releases, so prepare for multiple articles in your inbox.

This week, Diversified Energy (DEC) published its Q1 2026 results alongside the attractive acquisition of Camino Natural Resources. Representing the first major deployment of its strategic partnership with Carlyle, this deal is structured to keep the majority of the $1.175b transaction off DEC’s balance sheet while securing 100% of the undeveloped upside. As usual, The Oak Bloke has good commentary on both announcements, so I will try to keep this brief while still providing a comprehensive discussion on the mechanical nuances and the shareholder implications.

Surface-level metrics this quarter—such as a $161m net loss and a seemingly deteriorating current ratio—might raise eyebrows at first glance. However, a closer look at the cash flows, the SPV structure, and the non-cash derivative noise continues to confirm the company’s resilient business model. In this update, I will parse the Q1 financials, strip out the bookkeeping artifacts, and evaluate whether the Camino deal moves the needle.

For context and reference, my prior article was:

Materials Used

• Earnings Press Release (with links to other relevant materials such as the 10-Q)

  • Earnings Call Transcript

• Camino Acquisition Press Release

The Camino Acquisition

Generally speaking, the acquisition looks very attractive, but particularly so for DEC:

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Disclaimer: I own shares of Structural Monitoring Systems at the time of writing and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

Introduction

Following the release of Structural Monitoring Systems’ (ASX: SMN) Q3 FY26 activity report, AEM CEO Rick Freeman hosted an investor webinar on April 29 (slides, video). The presentation provided rich information that validates the core thesis I outlined in my articles and clarified several questions I had. On top, it alters my view of the longer-term trajectory potential favorably.

For followers of my previous SMN coverage (latest article), here are the key takeaways and thesis updates from the webinar:

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Disclaimer: I own shares of SenSen Networks Limited and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• The Bad: Q3 customer project delays—attributed to economic uncertainty and NVIDIA supply chain issues—mean FY26 revenues will fall short of management’s ambitious A$19.2m target, triggering a sharp share price drop.

• The Good: Annual Recurring Revenue (ARR) still grew 17% YoY to A$11m, and the company is successfully expanding into new verticals, including 32 new fuel retail sites, a smart city deployment in India, and early moves into critical infrastructure.

• The Cash Reality: While headline Q3 operating cash flow was positive (A$895k), this was driven by the A$2.05m R&D grant. Excluding this, the underlying business is burning cash, keeping liquidity and working capital risks in focus.

• The Valuation: At an estimated A$25.7m fully diluted market cap, the stock trades at 2.3x ARR and ~13x forward EV/EBITDA. Considering the operating leverage demonstrated in the past, the stock seems cheap, provided the delayed projects are simply deferred, not canceled.

Introduction

SenSen ($SNS.AX) shares have dropped lower since my last post, following the release of the quarterly activities report earlier this week. Shares are now hovering at just ~20% above their 52-week lows.

With macro issues beyond the company’s control, Q3 revenues were weaker than anticipated. However, company guidance and positive operational developments—such as the push into new end markets—suggest that, in my view, “this too shall pass.” I once termed this share price action as “Doing a Hobbit” (there and back again); unfortunately for those buyers who bought or held during the highs, we are back at the start.

While the headline cash flow looks healthy on the surface, peeling back the layers reveals a company that is still reliant on government subsidies to bridge its working capital needs while it waits on delayed project receipts. Let’s dive into the good, the bad, and the underlying cash flow reality to see if this drop is a buying opportunity or a structural warning sign.

Let’s dive in.

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Disclaimer: I own shares of Structural Monitoring Systems at the time of writing and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• The Overhang is Gone: The Ross Love court case has been settled with no admission of liability. The “governance arbitrage” catalyst from my initial thesis has materialized, yet the share price remains unchanged.

• Core Operations are Humming: The Avionics segment continues its strong trajectory with Q3 revenues of $5.7m. YTD Avionics sales are up 43% year-over-year.

• Mitigating the “Radio Cliff”: YTD MTP136D radio sales of 195 units suggest that the bulk of Avionics revenue actually stems from sticky, legacy audio products, significantly de-risking the post-upgrade cycle revenue floor.

• A Pristine Balance Sheet: The company repaid its remaining $0.8m of debt during the quarter. SMN is now entirely debt-free (excluding leases) and self-funding its R&D.

• CVM Bureaucracy Grinds On: Technical documentation was formally submitted to the FAA. We are officially in the administrative waiting room, …

Introduction

In January, I initiated coverage on Structural Monitoring Systems (SMN.AX) based on a specific setup: the market appeared to be pricing the company as a perpetual, cash-burning science experiment dragged down by a messy boardroom lawsuit, while the underlying reality was a growing, cash-generative, and profitable avionics manufacturer.

When a company executes a pivot, the market can take time to update its mental model, understandably so, as the numbers have to ultimately show it. The Q3 FY26 activity report strongly suggests that this fundamental pivot is working.

Not only did the core Avionics business post another quarter of sequential and year-over-year growth, but the company also crossed two de-risking milestones: it fully repaid its outstanding debt, and it settled the high-profile Ross Love court case. The governance overhang has now evaporated. Interestingly, the share price has shown no discernible movement in response.

This update looks at the Q3 cash flows and the business progress. For clarity, when I use the $ symbol, I refer to A$ in this article. For reference and context, please refer to my last article:

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Disclaimer: I own shares of Elixir Energy Limited and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Catalyst-Rich Timeline: The upcoming Xstate Diona-1 well test (April) and Elixir’s Lorelle-3 horizontal test (June) offer near-term, tangible de-risking events.

• Expanding Asset Base: A recent 24% increase in booked contingent resources brings total 2C resources to 3,455 BCFe, significantly expanding Elixir’s intrinsic baseline.

• Favorable Macro & Alignment: Insider buying, government-signaled regulatory streamlining, and a structural gas deficit in Eastern Australia provide robust tailwinds.

• Valuation Gap: Even on a fully diluted basis, Elixir trades at a roughly 50% discount to the E&P peer average for undeveloped resources, offering a compelling situation before considering potential M&A activity, further resource upgrades, or progress and de-risking towards production.

Introduction

If you hold the view that maintaining a stock position is a daily decision to re-underwrite the investment case, Elixir Energy presents an interesting study in volatility and underlying fundamental progress. Over the last year, the stock has experienced a dramatic recovery, essentially six-bagging from its deep lows of mid-2025 as the market began to properly price in the strategic value of its Taroom Trough assets.

My initial coverage of the stock was a speculation on the flow test back in July 2024 at a share price of AUD 0.115. While the initial flow test results fell short of expectations—largely due to operational complications—the situation has since shifted favorably. Following capital injections, a change in leadership, and key strategic farm-ins, we find ourselves at a higher share price today, but arguably with a highly de-risked operating structure.

Crucially, the macro environment has only tightened. The Eastern Australian energy market remains fundamentally tight — a situation likely exacerbated by the geopolitical constraints on global energy supply routes. As we look ahead, Elixir is sitting on a significant and growing booked resource base with an imminent sequence of catalysts.

For reference and context, my last article was:

Recent Updates & Upcoming Catalysts

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A single week passed, and we have a deal announcement! Shares appreciated close to the offer price, and while the deal still needs approval by the shareholders, I closed my position as I do not intend to keep it in the hope of another bidder potentially becoming interested.

This advanced much faster than I anticipated. For lack of better insight, I initially assumed it would take up to a year for a catalyst to materialize or a deal to close. This accelerated timeline is, of course, very welcome.

For reference, I described the case in:

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Disclaimer: I own shares of Canada Nickel Company and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• The “Orphan Period”: Canada Nickel (CNC) is still amidst the “Lassonde Trough”, the phase between feasibility and construction.

• Imminent Liquidity Catalyst: A CAD 29.7M bridge loan matures in May 2026 against CAD 13.8M in cash. Resolution of this overhang is the most critical near-term catalyst, but the company has used and addressed these vehicles in the past.

• Funding the $2.5b Build: Visibility on the full Crawford funding package (debt LOIs, investment tax credits, and strategic equity from Samsung SDI) is expected by Q3 2026.

• Geopolitical Tailwinds: Indonesian supply constraints and shifting Western defense policies create a favorable macro backdrop for North American sulfide nickel.

• Valuation: Trading at roughly ~0.1x of Crawford’s $2.8B NPV8. While pre-production dilution is guaranteed, the presence of major strategic investors provides comfort for speculative capital.

Introduction

In mining investment, there is a well-documented psychological and financial cycle known as the Lassonde Curve. After the initial euphoria of discovery, a developer enters the “Trough.” During this phase, the initial speculative hype fades, the sheer reality of billions in required capital expenditure sets in, and the share price stagnates or retraces.

Canada Nickel Company (CNC) is currently living in this trough. Since my last update, the company has made significant strides—advancing federal permits, securing power network agreements, and locking in strategic partnerships. Yet, the market capitalization sits at a roughly 90% discount to the Crawford project’s $2.8b Net Present Value (NPV8).

Is the market mispricing a generational asset, or accurately discounting the massive funding hurdles and dilution risks required to break ground? In this update, I focus on the 2026 milestone roadmap, cover briefly my view on the state of the nickel macro environment, and the mechanics of the $2.5 billion funding package required to turn Crawford into reality.

For reference and context, my last article was:

Upcoming Milestones

For 2026, Canada Nickel has established several critical milestones focused on permitting, financing, and the commencement of construction for the Crawford nickel project.

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Disclaimer: I own shares of the company discussed in this article and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• The Good: The balance sheet was officially de-risked during the year. Management wiped out the legacy debt load by making use of an ATM offering, resulting in zero debt and an undrawn credit line.

• The Bad & The Ugly: FY25 revenue declined year-over-year due to its volatile segment facing significant headwinds this year. Operating losses worsened due to heightened investment, and Adjusted EBITDA compressed.

• The Alpha: The long-time CEO recently stepped down. A deep dive into SEC filings reveals the new CEO’s compensation is tied to a “Transformation Plan”. Is the company entering a “scale and sell” phase of the majority owner’s playbook?

Introduction

The company recently reported its FY2025 results, delivering a mixed bag that requires investors to look beyond the headline numbers. On the surface, the company is grappling with a top-line revenue decline, contracting EBITDA, and expanding operating losses. However, the company is free cash flow neutral, and a deeper dive into the filings reveals a de-risked balance sheet, green shoots in the high-margin SaaS segment, early signs of a recovery in the volatile business segment, and a C-suite shakeup with InfoArb potential.

With the CEO transition under the watchful eye of the majority shareholder, the narrative is shifting from “stabilization” to “transformation.” In this article, I will unpack the FY25 financials, make an attempt to decode the tea leaves of the recent boardroom maneuvers, and update the valuation framework for this micro-cap.

For reference and context, please see my last article:

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Disclaimer: I own shares of the company discussed in this article and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

Introduction

This is a very brief update on important news and developments since my last article.

The “Free Roll” Vindicated

In investing, timing is rarely perfect, but sometimes you get lucky by simply respecting the risks.

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Disclaimer: I own shares of Diversified Energy Company and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. I use AI tools to help me in my research, writing, and editing processes. Investing bears risk, such as loss of principal.

TL;DR

• ARO De-Risking Activity: DEC has started to structurally neutralize the market’s central criticism: the terminal Asset Retirement Obligation (ARO). Through the “Mountain State Plugging Fund,” DEC is starting to ring fence the liability for more than a quarter of its entire well portfolio into a bankruptcy-remote vehicle. By paying a highly manageable total of $70m over two decades, DEC will ultimately cap its sizable undiscounted long-term exposure that looms beyond the initial 20-year seeding horizon.

• DEC’s Next LVL Subsidiary: a highly strategic gem with very attractive margins, and I provide the math to illustrate it.

• Significant Balance Sheet Expansion: due to M&A uptake, but the leverage remains within the target band.

• I see signs of a shift in hedging commodity exposure.

Introduction

In my previous articles, I outlined how Diversified Energy Company (DEC) was misunderstood by the market—priced as a declining, highly leveraged runoff operation when it was quietly building a highly profitable, vertically integrated asset retirement engine. Following their transition to a full US domestic issuer and the release of their FY25 results, the underlying fundamentals are becoming harder for the market to ignore. This update reveals a business that is operationally and financially progressing well. From the discovery of a counter-cyclical tax shield to an ARO assurance fund, this article delves into why the core tenets of my thesis are intact and, I believe, accelerating. I apologize for the length of the article, but following the very recent share price appreciation of almost 50% in March, I felt an in-depth review was in order.

For reference and context, my last article was the H1 update in August last year:

Materials Used

• Form 10-K, ARS

• Presentation

• Press Release

• Proxy Statement

• Transcript

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Disclaimer: I own shares of the company discussed in this article and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• The company delivered a strong positive earnings swing.

• Gross margins expanded impressively, and cash from operations before working capital changes hints at cash flow potential at scale.

• An already disclosed material weakness in internal accounting controls led to a massive downward revision in audited net income versus preliminary results.

• Furthermore, stock-based compensation results in continued shareholder dilution.

Introduction

Analyzing pico-cap companies requires balancing impressive headline growth against the structural realities of micro-businesses. At first glance, the company’s results are stellar: the company delivered an inflection to full-year profitability, fueled by a surge in revenue and expanding gross margins. For a company valued at less than $10 million, this operating leverage is exactly what investors want to see.

However, peeling back the layers of the 10-K reveals a more complicated picture. While the underlying business is clearly gaining traction and navigating a tough consumer environment, the financial mechanics underneath—ranging from material weaknesses in accounting controls to related-party loans and dilutive compensation—beg the question: Is this growth actually accruing to the minority shareholder?

For reference and context, my last post was:

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Disclaimer: I currently own shares of Exasol AG. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Turnaround Achieved: Exasol delivered on its profitability promise, generating €4.1m in EBITDA, €3.0m in Net Income, and €3.9m in Free Cash Flow. The cost and solvency turnaround has largely succeeded; the commercial re-acceleration case remains to be proven.

• Growth Reality Check: The focus verticals ARR grew to €26.7m (+10.1% YoY). While still a solid double-digit print, this is a noticeable deceleration from the 24% growth seen during the year.

• Hardware Margin Hit: Cost of materials surged 133% as the hardware “appliance” strategy took off. Trading gross margins for a tighter integration with customer processes cements customer stickiness, but impacts the margins.

• Valuation Asymmetry Intact: The legacy R&D accounting drag is in its final year, and the company revealed double-digit customer adoption of its new AI features. The market prices heavily discount the growth opportunities, which comes as no surprise given the guidance for a revenue decline. But even with tempered growth assumptions, the downside is heavily protected by a €18.7m net cash pile.

Introduction

In my initial Phoenix Rising article, I outlined a thesis of two businesses hiding under one ticker: the shrinking, non-focus verticals (the “Bad Co”) masking a sticky, sovereign-compliant banking and healthcare core (the “Good Co”).

The release of Exasol’s audited FY2025 Annual Report provides the ultimate reality check for this thesis. On the bottom line, the results look like success. Management’s operational discipline delivered growth in profitability, which de-risks the company from a balance sheet perspective.

However, surviving is not the same as thriving. While the turnaround of the cost structure is complete, scaling the remaining core business commercially is currently a grind. The audited numbers reveal a noticeable deceleration in the focus verticals, a margin hit from their hardware strategy, and an evolving risk landscape following M&A activity by a partner. FY2025 suggests that Exasol has crossed from “can it survive?” to “can it grow enough to deserve more than a steady-state multiple?”, and that distinction matters. The balance sheet and cash flow now look far less fragile. But the burden of proof has shifted to commercial execution: re-accelerating focus verticals ARR, proving that partnerships can scale, and showing that AI and “Lakehouse Turbo” are not merely technically interesting, but economically relevant.

This update analyzes the FY2025 financials to determine whether the recent valuation contraction correctly prices in these developments, or if the market is missing a profitable, cash-flowing infrastructure asset trading below its intrinsic value.

For reference and context, my last article was:

Materials Used

Press Release

Annual Report

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Disclaimer: I own shares of Wickes Group plc and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. My research and writing process is assisted by AI tools to enhance analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Robust Execution: Despite a subdued consumer backdrop, Wickes delivered strong FY 2025 results with revenue up 5.9% and adjusted PBT up 14.4%, suggesting its “self-help” strategy is driving tangible operational leverage.

• Accelerating Growth: Capitalizing on the success of its smaller-footprint stores, management has raised its medium-term network ambition from 250 to 300 stores to capture more share of its £35b TAM.

• Favorable Unit Economics: Analysis of the underlying financials reveals that Wickes’ business model remains highly cash-generative, funding growth CAPEX and shareholder returns simultaneously.

• Undemanding Valuation: Adjusting for the optical distortions of IFRS 16 lease accounting, the company trades at an estimated pre-IFRS 16 FCF yield of ~14.4% and an IFRS-16 adjusted EBITDA yield of ~15.6%.

• Shareholder Returns: Capital allocation remains disciplined, with the dividend maintained at 10.9p and a new £10m share buyback announced for 2026.

Introduction

In a retail environment where “caution” remains the prevailing theme and discretionary spending on big-ticket home projects is tight, Wickes Group plc (WIX.L) delivered what I consider a strong set of FY 2025 results: a 5.9% increase in revenue and a 14.4% rise in adjusted profit before tax.

The FY2025 release is strong, but I think the most useful way to read it is not as a “macro recovery” story. It is better understood as a company-specific execution story inside a still-muted end market. Retail growth remained volume-led rather than price-led, Design & Installation continued to improve from the operational changes made in 2024–25, and management is now using that evidence to justify a more ambitious property rollout. That is encouraging — but it also means the next debate shifts from “can Wickes stabilise?” to “how durable are these gains once investment intensity rises further?”

In this update, I will unpack the FY 2025 financial performance, dissect the changing risk and audit disclosures, and revisit the valuation from multiple angles. By stripping away the optical distortions of IFRS 16 lease accounting, we will see if the market is still fundamentally mispricing this cash-generative and market-share-gaining retailer.

For context and reference, my last article was

Materials used

• Press Release

• Annual Report

• Transcript

• Presentation

FY2025

Changes in Risk Disclosures and Critical Audit Matters

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Disclaimer: At the time of publication, I do not own shares of Flow Traders mentioned. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

Introduction

With the publication of its Annual Report 2025, I provide a (very) quick follow-up on my last article:

My take: While the company’s share price recently held up very well, likely due to the challenging macroeconomic and geopolitical environment, the audited financials unfortunately confirm my critical view. Yes, the shares trade at about 9x 2025 diluted EPS, but there is a sign of weakness in the business that concerns me.

Why did my Concerns Deepen?

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Disclaimer: I own shares of IDT Corporation and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. My research and writing process is assisted by AI tools to enhance analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Growth continues: Revenue grew ~6% YoY, and the three growth segments (NRS, Fintech, net2phone) generated more than half of operating income for the second consecutive quarter.

• EPS miss driven by expenses: GAAP EPS of $0.84 missed analyst expectations due mainly to higher SG&A, including a five-fold increase in stock-based compensation.

• Digital migration in remittances: The federal tax on cash remittances appears to be accelerating migration toward the higher-margin digital BOSS Money channel.

• Capital returns remain strong: Dividend was raised 17%, while share repurchases continue to support per-share value.

Introduction

IDT reported Q2 FY2026 results after Tuesday’s close. The initial market reaction was negative, with the stock selling off before recovering much of the decline the following day. The quarter highlights a familiar issue for investors: headline metrics appear strong, but the underlying earnings quality is more nuanced. In my view, this quarter was less a deterioration in the business than a quarter where elevated investment spending temporarily masked otherwise steady operating progress.

On the surface, the results look solid. Revenue grew roughly 6% year-over-year, adjusted EBITDA reached a record level, and the board increased the dividend by 17%. However, the details explain why GAAP EPS of $0.84 missed analyst expectations of roughly $0.90–$0.91.

That EPS miss needs to be interpreted carefully, though. While operating income declined modestly year-over-year, I believe the decline was driven mostly by expense timing rather than deterioration in the underlying businesses. In particular, the sharp increase in SG&A and stock-based compensation compressed near-term margins. The key analytical question, therefore, is whether these costs represent structural expense inflation or a temporary investment phase aimed at accelerating growth in NRS and Fintech. My current interpretation leans toward the latter, but this remains a key variable to monitor in the coming quarters.

While the Form 10-Q has not been filed yet, I issue this article as a first take and will reassess the details as the SEC filing gets published. For context and reference, my last article was

Materials Used

• Press Release

• Earnings Call transcript

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Disclaimer: I own shares of Structural Monitoring Systems at the time of writing and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Statutory Noise vs. Cash Reality: A $1.6m one-off, non-cash overhead adjustment suppressed reported EBIT and gross margins. It also caused a discrepancy to after tax numbers compared to the 4C report of January. Excluding this, gross margins actually expanded to ~58.6%, painting a much healthier picture of underlying profitability.

• Strong Cash Conversion: Lease-adjusted Free Cash Flow for the half-year came in robust at $2.8m; the industrial segment is funding its own growth and demonstrating strong margin expansion.

• R&D Has Shifted, Not Stopped: The apparent drop in R&D expenses on the P&L is merely an accounting shift. The company capitalized $0.55m in development expenses, confirming ongoing investment in the technology pipeline.

• Valuation Support: Trading at an ~8% lease-adjusted FCF yield (and double-digit % yield when adjusting for unrecognized tax assets), the core Avionics business continues to justify the current valuation, keeping the CVM technology as a long-dated option-like upside.

Introduction

In January, I outlined the governance arbitrage opportunity in Structural Monitoring Systems (ASX: SMN). The core thesis was that the market was mispricing a suddenly profitable, cash-generative industrial avionics manufacturer due to boardroom drama and legacy perceptions. In doing so, the market was effectively offering the company’s blue-sky CVM sensor technology as a free call option.

At the end of February, the company released its statutory Half-Year 2026 (H1 FY26) results. For fundamentals-driven investors, half-year reports are the “moment of truth” where early quarterly cash flow statements (4Cs) are finally reconciled against strict accrual accounting.

On the surface, the headline operating profit of $0.55m might seem underwhelming compared to recent momentum. However, looking under the hood reveals a $1.6m non-cash accounting adjustment that obscures what was actually a period of significant margin expansion and strong free cash flow generation. In this update, I will peel back the statutory noise, resolve some lingering questions around R&D spending, and update the valuation framework to test if our thesis still holds water.

Asian Century Stocks also initiated coverage of the company. I am not a paying subscriber, so I cannot talk to the content behind the paywall, but I wanted to highlight that the name gets increased coverage. Hence, I also reveal the name, and I, too, would like to take the chance to express my appreciation for the posts of gezzogero that made me aware of the company.

For reference and context, my initial article was:

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HY report 2026

HY report 2025

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Disclaimer: I own shares of Vistry Group plc and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Vistry delivered solid FY25 results, reporting £354m in adjusted operating profit and reducing net debt to £144m. However, shares collapsed due to a “perfect storm”: the announced retirement of architect CEO Greg Fitzgerald, uninspiring 2026 profit guidance, and not using buybacks more aggressively at the current valuation.

• Beneath the surface, the operations are intact. My reconstruction of the cash flow statement suggests an underlying pre-IFRS 16 free cash flow of roughly £250m - an almost 19% FCF yield on today’s equity. Furthermore, the stock now trades at a roughly 40% discount to Tangible Book Value (£2.16b).

• Management’s decision not to lean more aggressively into buybacks to pay down a modest year-end net debt figure when shares are trading at 0.6x TBV can be seen critically by investors and possibly compounded the sell-off. But seeing the decision in conjunction with the increase in the land creditor payables and the average daily debt (a metric that captures intra-year funding swings) makes it a prudent move.

• The transition to a capital-light model is progressing, and the regulatory tailwinds (Rent Convergence, £39bn AHP) are strengthening. I believe the risk of a new CEO “kitchen-sinking” expectations is low, and the current 0.6x TBV multiple provides an overwhelming margin of safety for patient capital.

Introduction

If you want to see what a crisis of market confidence looks like, look no further than Vistry Group’s FY25 results.

On an adjusted basis, the company reported stable revenues, slightly improved profit margins, and a reduction in net debt. Yet, the market reacted as if the company had announced an impending insolvency. Likely, the profound share price collapse was not driven by the trailing performance, but by a triad of forward-looking uncertainties: the retirement announcement of the company’s CEO, the muted profit guidance for 2026, and management deciding not to increase the current buyback program at this valuation level.

For investors, the job is to separate structural business decay from temporary market indigestion. When a stock drops to 0.6x Tangible Book Value while it is generating ample free cash flow, we must ask: Is the market efficiently pricing in a broken business model, or is it indiscriminately dumping a misunderstood transition story because the near-term catalysts have vanished?

I see the investment case for Vistry resting on two separate questions. First, whether the company’s strategic pivot toward a Partnerships-focused development model can structurally improve returns on capital over time. Second, whether the current share price decline reflects a temporary confidence shock, rather than a deterioration in the underlying economics of the business. The analysis below attempts to examine both dimensions separately.

For reference and context, my last article was:

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• Annual Report

• Presentation

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• Mike Sharp’s YT video discussion of the results and the stock reaction

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Disclaimer: I own shares of Global Crossing Airlines Group Inc. and stand to benefit if they rise in price. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. AI tools assist my research and writing process, enhancing analytical efficiency and clarity. Investing bears risk, such as loss of principal.

TL;DR

• Operational Inflection: GlobalX swung from an operating loss of $1.1m in FY24 to an operating profit of $8.9m in FY25, driven by passenger charter strength, although the cargo segment remains a severe drag on EBIT.

• Maturing Capital Strategy: Management is shifting from purely leasing aircraft to a hybrid model of acquiring older airframes while leasing engines. This isolates heavy maintenance risk while trading operating lease obligations for debt.

• Increased Insider Ownership: Insiders now own ~48% of shares, significantly reducing the share float.

• Negative Cash Conversion Cycle as Liquidity Engine: Despite a worrying low current ratio (0.44), the company operates a structural, deeply negative cash conversion cycle, effectively using customer prepayments to fund its growth without excessive equity dilution.

• Valuation: The company trades at roughly 2.3x EV/EBITDAR. If the company successfully scales its multi-hub strategy and normalizes cargo, a re-rating toward the industry hybrid/charter median (4.0x - 5.0x) offers significant equity upside. This scenario does not even require the growth options.

Introduction

Global Crossing Airlines (GlobalX) reported its FY25 results yesterday, marking a transitional year for the hybrid ACMI and charter operator. While top-line revenue grew by 10% to $246.3m, the true story of FY25 is in the company’s evolving capital allocation and fleet strategy, in combination with the underlying cash flow mechanics.

GlobalX demonstrated meaningful operating leverage, bringing 44% of incremental revenues directly to the operating income line. Yet, the market continues to price the equity with a heavy discount, likely spooked by a low current ratio, a heavily leased balance sheet, and a cargo segment that continues to drag on profitability. As a result, the free cash flow yield is high, as the market ultimately discounts the company’s operating situation.

For context and reference, please see my prior article:

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Press Release

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Financial Statements

Fiscal Year 2025

Changes in Risk Disclosure

Reviewing Global Crossing Airlines’ (GlobalX) FY25 disclosures, the narrative has definitively shifted. Here is what we can infer about our investment thesis today:

Moving from purely leasing to acquiring and financing aircraft may change the margin profile and the balance sheet risk. While this allows them to build hard equity value and potentially incur lower lifetime unit costs, it introduces debt servicing and asset residual value risks. At the same time, post-IFRS-16, the leasing was already on the Balance Sheet. If they are buying metal, we need to watch their debt covenants and interest coverage ratios much more closely, especially given their newly added warnings about the Federal Reserve’s rate environment.

The "Asset-Light" Thesis Evolves
Last year, GlobalX stated they planned to “lease all of our aircraft.” This year, the phrasing changed to “lease or finance the majority of our aircraft,” with new mentions of “ownership” and “purchase agreements.” At first glance, investors might assume buying planes means piling massive new leverage onto the balance sheet. But under ASC 842, most operating leases are recognized on the balance sheet as right-of-use assets with corresponding lease liabilities, meaning the economic leverage of aircraft leases is already partially reflected in reported liabilities.

So what is management actually doing here? Widening its options. By purchasing older airframes while leasing the engines, GlobalX is executing an efficient playbook:

• Isolating the Capex Risk: Engines represent the lion’s share of maintenance costs and wear-and-tear. By leasing the engines, the asset write-off risk and heavy maintenance risks are capped. By owning the airframe, they avoid the strict, expensive “return conditions” that lessors demand when a plane is handed back.

• Income Statement Geography: This shift will alter how GlobalX’s profitability looks. In particular, it will impact the difference between EBITDA and EBITDAR.

• The Trade-off: The new risks are residual value risk, possibly debt covenants, and possibly not properly building maintenance reserves (as opposed to lease rates that directly come with an embedded portion for maintenance). With an operating lease, you walk away at the end of the term. By owning the metal, GlobalX is betting it can extract enough economic value out of these airframes over their remaining useful life to justify the residual risk. On the upside, it opens the opportunity to a) fish in a bigger pond to grow the fleet, and b) find the deals that make the most economic sense, regardless of whether owned or leased.

In summary, GlobalX is graduating to a more flexible fleet strategy. For a charter operator with lower daily utilization rates than a legacy commercial airline, owning cheap airframes is a margin-enhancing move. Investors need to be aware of this change and the possible implications for the profitability metrics.

Maturing Operations and De-risking the Network
A major linchpin for GlobalX was its single point of “failure”: Miami International (MIA). The FY25 filings now show a multi-hub model, adding Alexandria (AEX) and Harlingen (HRL). Operational diversification matters because aircraft repositioning costs can quickly erode margins (refer to OPEX items Fuel and Travel). A multi-hub structure reduces ferry flight distances and improves scheduling flexibility when contracts originate in different regions. In practice, this can raise effective aircraft utilization even if total fleet size remains unchanged, as aircraft spend fewer hours flying empty between assignments. Furthermore, management explicitly added language detailing how they are actively fighting the charter industry’s seasonality. By utilizing “longer-term contracts with guaranteed minimum hours” and geographic diversification, they are smoothing utilization and cash flows (e.g. flying in Europe for TUI last summer).

The Cap Table is Cleaner, and Insiders Are Eating Their Own Cooking
The FY25 document completely strips out the risk section regarding warrant conversions, implying a significant cleanup of the capital structure. Simultaneously, insider ownership of the outstanding common stock increased from 40% to 48%. Now, nearly half the company is closely held, which effectively shrinks the float. It suggests that the team believes in the long-term value of the equity.

The Macro Risks
While the micro-story of GlobalX looks stronger, the macro risks have increased. The company added highly specific language around the geopolitical landscape—calling out everything from Middle East instability to the strength of the U.S. dollar. Most notably, it added a new warning about the threat of retaliatory tariffs on commercial aircraft and imported parts.

While focusing on North America, GlobalX, with its growing fleet, is exposed to macroeconomic shocks outside of its control. Higher maintenance part costs due to tariffs, paired with volatile fuel prices, could quickly erode any profitability gains achieved through scale.

Bottom Line: The language suggests GlobalX is no longer just an aspiring start-up but a scaling operator with a multi-hub footprint and heavily invested insiders. However, with the transition toward aircraft ownership and rising global trade tensions, the margin for error has shrunk. I’m keeping my eye closely on how their new long-term contracts translate to cash flow stability in the upcoming Q1 FY26 print.

20260306 Risk Factor Diffs

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Changes in Critical Audit Matters

In reviewing the auditor’s letter, there are no Critical Audit Matters (CAMs) listed for either this year or last year. This is not an omission by the auditors, a lack of scrutiny, or a green light that there are no accounting judgment call. Instead, it is a function of the company's corporate status. As explicitly stated in their 10-K Risk Factors, GlobalX qualifies as an “Emerging Growth Company” (EGC) under the JOBS Act. Under PCAOB rules, auditors of EGCs are exempt from the requirement to communicate CAMs. Investors should simply view this as a standard regulatory exemption for a company of this size and vintage.

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