A rock and a hard place

One potential problem with being a listed company is that you keep on having to go back to the market to tell everybody what’s been going on. It’s like an endless succession of end-of-term reports, which are fine for the brighteyed enthusiasts at the front of the class, but less enjoyable for those who spend most of their time confined to the corner sporting the dunce’s cap.

At least if you’re a private company you can just report to a couple of shareholders rather than have the whole JSE blow raspberries in your direction.

The big issue is that if you keep on disappointing the market, your credibility goes straight to zero, nobody will touch your shares, and very soon your market cap will have shrunk to a level at which you’re totally uninvestable.

Rockwell’s market cap is down to R22m, its share price having dropped more than 90% from its peak three years before it was suspended earlier this year. It has managed to recover a few decent-sized stones, but it’s nowhere near breaking even, losing US$2.7M in the first quarter.

The company has three subsidiaries in business rescue, and the hope is that the business rescue practitioners will work alongside management to return them to solvency and allow the company to ramp up production to get back to break-even and beyond.

There must be a feeling that Rockwell’s not going to be allowed many more chances; that it had better execute its turnaround plan and return to productivity, or it’s going to be time to turn out the lights.