Will be interesting to see how this strategy translates across UK, US and other markets, though it shouldn't take long for the company to work out what taxpayer support is available in other territories. It's obviously important we are able to sell each of our products across multiple markets to create necessary scale and to build a global user base.
Also worth pointing out that it isn't clear how the 40% drop in price impacts profit margins, and at what point the company reaches breakeven and is able to start building free cash flow. At the reduced pricing, the company needs to generate over 160% the volume to generate the same revenue. If Life sales have been below expectations to date, this pricing shift may be as much a correction of a prior pricing error as it is a reflection of support scheme eligibility requirements. If so, at least the correction is now being made and the company giving itself a chance to move more units.
All up this should be a very positive development for sales volumes, offset somewhat by the material price reduction. With the delayed rollout it looks like it may have a reasonable impact on Life volumes and sales from FY22, at least in Australia.
SPA Price at posting:
16.0¢ Sentiment: Hold Disclosure: Held
