Sales revenue discussion, page-25

nice to see this thread created, well done mate.

I took a slightly different approach, taking into account some high level cost assumption that was given by management on the 1H22 call.

What I find useful is whether or not any sales announced by management are ahead or behind where they need to be. Record sales in themselves are not meaningful if they are below their expectations. And if sales are behind or ahead, that allows me to recalibrate for the remaining months and so on.

That being said, they guided that expenses will be higher in the second half. I've bumped it to A$22.0m, but it could be more or less.. though I hope it isn't too far off that.

In which case, assuming cash is collected in a timely manner... if they 'break-even' for the year from a cash flow perspective they will need to generate around $26.4m in revenues to get to a closing cash balance of around $11m ($7.7m opening cash for the year + $3.3m from property proceeds).

They've already banked $4m in Jan22, so for the 5 months to Jun22 they need on average $4.5m in sales each month.

Obviously is expenses are lower than $22m in the second half, that brings it down. As an example, if it was $21m, then they will need $25.4m or an average of $4.3m each month.

So if they start posting anything below mid $4m's then they will need to make up for that in the future months, but conversely if they start posting $5m or $6m months, then you'll know they are on track to post a positive cash flow for FY22.. which I predict will be well rewarded from a valuation perspective.