Take your valid point on quarterly slippage between when revenue is booked compared to when cash is received. However - using your rule of thumb formula, cash receipts in 4th Q 21 should have been $6.9 mill vs $5.3 actual (my $5.6 mill was an error)
5 year revenue goal is $100 mill. At 25% gross profit margin - that produces roughly $25 mill gross profit. Below the line costs are already $24.4 mill in FY21 so unless these can be kept the same on 5 years time - company will be still in the red. Cash flow even more in the red given growing working capital and capex requirements.
Continuous revaluation of pina crop is good for the balance sheet and propping up earnings and EBITDA but what’s the current value of immature pina? One has to tend the crop for four more years (arguably longer) until it can be harvested/sold/used - assuming it all gets to maturity.
3rd quarter FY21 company update/report cited $4.9 mill as the prospectus FY21 Sales and Marketing forecast. Unless there’s another prospectus I’m unaware of - the forecast was actually $3.2 mill.
Unless they can outdo competition on taste (not tried Ned but reviews are mixed), success becomes a branding exercise and expansion of distribution channels - but if the product ain’t good - Aussies won’t buy just on the “buy Australian made” appeal.
I am behind the goals of the founders and seeing them succeed as they have been ballsy and sunk a lot of their own capital in, but unfortunately give it low probability. There really was a good reason why there wasn’t a mid-marker high volume Aussie spirit producer IMHO.
TSI Price at posting:
$1.82 Sentiment: Sell Disclosure: Not Held
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