Ann: Reckon Sells APMG Business for $100m, page-21

No worries mate always down for a productive chat.

If we assume the banking license currently takes up about 10-15% of staffing costs and 5% of admin and product manufacturing/operating costs, then this means the costs of the banking license equates to roughly 1.5mil per quarter.

Using this hypothetical figure, and if we exclude this from our March quarter cash deficit, we have a deficit of 2.8Mil.

Lets fast forward 12 months from now, and we say growth of 70% YOY, we’re looking at cash receipts of 27.2mil (16 * 1.7).

Lets also say that the 95% of admin and product manufacturing and operating costs that do not relate to the banking license grow at the same rate as receipts of 70% YOY

We would have:
product manufacturing and operating costs of 20.3Mil
admin costs: 2.5Mil

And lets assume all other costs stay the same:
Advertising: 0.2Mil
85% of staff costs (as 15% relate to banking license): 5mil

And, add RKN dividend of 0.45mil received.

Adding all these together brings us a total cash deficit of 0.35 MIL.


Now this assumes that NOV makes absolutely no strides at all in improving their margins, which they’re obviously going to do.


Don’t get me wrong this is all hypothetical and theres other financing costs and such, but it’s just a simple example to show that in 12 months time this company is quite capable of reaching cash flow surplus’