I read this announcement this morning and my gut reaction was not favourable.
Points to note (please correct me if I have made any errors):
- They have advised FY15 rev will be about $23m (I was expecting $25m+). 1H15 rev was $11.384m, therefore 2H15 rev is ~$11.616. That is only a 16.7% growth from 2H14 and 2.04% growth from 1H15.
- As you can see in the graph and table below, the rate of growth has slowed.
- They increased rev in FY15 by $5.2m. If that rate of growth continues they will clearly not reach their oz run rate targets IMO. They have reaffirmed $30-50m oz run rate by dec which is only 5 months away now. The slow down in growth rates suggests that that target maybe wishful thinking. It may have been wiser to reduce the target to $25-30m in this announcement?
- If they don't make their oz targets, the market will mark them down. It will then increase the doubts over them reaching their aspirational US targets.
- They say they have increased spending on marketing, but this is not being reflected by increased rev growth rates. Expenses increasing as revenue growth slows.
- Cash at end 1H15 was $21.768. Cash at end 2H15 was $17m (The $1.8m R&D credit will be recognised in 1H16). I estimate that they received $1.944m cash from the exercise of share options in 2H15. If you leave that out, that's a net decrease in cash of $6.7m over the last half.
View attachment 77192
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
| 1 |
|
FY |
rev |
CRP %change |
Sequential %change |
| 2 |
a |
1H 13 |
4117 |
|
|
| 3 |
a |
2H 13 |
7131 |
|
73.21 |
| 4 |
a |
1H 14 |
7892 |
91.69 |
10.67 |
| 5 |
a |
2H 14 |
9954 |
39.59 |
26.13 |
| 6 |
a |
1H 15 |
11384 |
44.25 |
14.37 |
| 7 |
f |
2H 15 |
11616 |
16.70 |
2.04 |
Happy to sit on the sidelines for the time being. Sold this morning for 64c. My gut reaction is they are priming the market for an average result due 25 August. I cant see the sp going up based on this announcement.
All IMO and DYOR
