Ann: June 2016 Quarterly Report and Appendix 4C-YOW.AX, page-30

A number of key positive drivers
We believe the quarterly report included a number of positive points, including strong annual operating cash flow through a very rapid growth phase, a number of new customer announcements and higher average selling prices due to channel mix.
The share price sold off over the day, but we highlight the long term thesis appears to be intact and believe this presents a good buying opportunity.
4Q "retail sales value" estimated at U$7.3m or U$26.4m for FY16
The company did not include their usual "retail sales value" chart in the quarterly report; however, we estimate sales value was approx. U$7.3m for 4QFY16, which implies ~2.4m units and ~U$3.7m of wholesale revenue for Yowie. While this sales value was lower than the 3Q, we had expected the seasonal weakness to cause a 7-10% dip in revenue, so it was in line with our seasonal expectation.
FY16 growth strong, but a little below our bullish estimate
This takes full year FY16 estimated revenue to U$13.4m, or 346% growth vs FY15. This is below our FY16 estimate of U$14.7m due to a lower average wholesale price received, although they suggest this average price is increasing with the expanded channel mix.
New accounts likely to be ordering for 1QFY17
The company highlighted new accounts that were signing up, suggesting momentum into the 1QFY17 is positive: New accounts secured in the quarter included (but not limited to) Jo-Ann Stores, Holiday, S. Abraham & Sons, Wegman’s, Great Lakes, Heartland, Super America, Weigel’s, Nugget Market, Vons, Save Mart Supermarkets, DC Grocery Cash, B. Green & Co and Vista.
Yowie did not report total retail store count, but we expect it will be in excess of the 23,000 they reported last quarter and ramping higher in the busier Sept and Dec quarters.
2HFY16 operating cashflow strong vs our estimate
We note the 2HFY16 operating cashflow was -U$0.4m versus our conservative –U$3.1m, so a beat versus our estimate. Full year operating cashflow was -U$0.2m despite the very strong growth, which we see as positive in a working capital intensive business with long lead times, such as confectionary.

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