Yes I agree. The current ratio and short term liquidity/ lack of cash for the div issue are the only areas of concern.
I'm also continuing to hold but I want to see that the capital investment in the 21 FY carry through into an improved result and working capital position in 2022.
They had a crack at addressing the shortfall in working capital in the notes.
The Statement of Comprehensive Income shows a profit for the period of $3,962,998 (2020: $3,013,335).The Statement of Financial Position shows that as at 30 June 2021, current liabilities exceeded current assets by $8,244,662 (June 2020: net current liability position of $1,974,004) for the Group.
The increase in deficit arises due predominantly to the following:
(i) The current loans and borrowings increased from $5,981,098 at 30 June 2020 to $7,898,384 as at June 2021 being an increase of $1,917,286. In addition, current lease liabilities increased from $3,420,761 at 30 June 2020 to $4,645,552 being an increase of $1,224,791.
(ii) Purchases of plant and equipment of $17,409,884 during the period ($13,101,140 in the prior comparable period) was financed through the use of cash and an increase in trade creditors. Trade creditors have increased from $16,234,858 at 30 June 2020 to $25,122,155 as at 30 June 2021, partially offset by the increase in prepayment from $2,355,240 to $4,393,545 for the same comparable period.
The group refinanced in May 2021 which increased its headroom at year end to $12,523,224 and total facility from $23,878,521 at 30 June 2020 to $36,168,000 same date this year (see note 16) and raised capital of $10.5m in July 2021.In addition, the directors are confident the company has a number of alternative funding options available if required to cover the deficit including operating cash flows that will be received off the capital expenditure undertaken during the period. Total operating cash flows for the year was $12,352,676. The group has also the ability if required to divest existing idle property plant and equipment and significantly reduce its capital expenditure. Total written down value of property plant and equipment at 30 June 2021 was $83,008,854 and total net assets as at 30 June 2021 was $61,487,443.
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