Ann: Appendix 4C - quarterly, page-64

Future looking. 4C has costs estimated of $11.8m. Last 4 4cs has been 99% accurate in forecasts being realised. Assuming QoQ revenue trend of 26% and tight revenue to receipts conversion (which is demonstrated in last few qtrs), the operating CF gap widens to -$3.8m. This is backwards to getting to breakeven.

The cost uplift is mostly staff, about $2m. Could be good to accelerate future sales but is adds the need to generate $8m more revenue/cash over CY18 above the $33m target which breakeven is predicated on. Including today's, last 3 qtr reports have operating cashflow in mid $3m range (sideways trend) plus some PPE/Business investment costs (which are probably capitalised to make it easier to EBITDA breakeven on P&L accrual). AHZ is spending its growth effectively. On-track to do the same next qtr. Not quite the trend or makings of breakeven by CY18 end.

The presentations tell one happy breakeven story (via accrual P&L), the CF statements are telling another. That story is one of a CR by year end or need to lever up more or pull off a good deal on a dud vaccine if they keep ramping expenses in line with topline growth. Can only make breakeven if there is a cost freeze from now on i.e. never spend more than 11.80m per quarter. Breakeven by CY18 end is possible but not as likely as some may believe. I rate it as 32% likely.

Anyone see this discrepancy between the Sept and Dec qtr reports?





Also today's report is using QoQ comps, last report was PcP. Also in the last one htey had underlyign revenue figure ($5.3m revenue) which was sued to show better growth as statutory was $5.0m. In today's, they comped the quarter's $6.3m revenue against the statutory ($5.0m). If you do a proper comp to the underlying, growth was instead 19%.