PNV - Banter and General Comments, page-12138

"In FY25 our revenue forecast of A$125.2m sits below consensus at A$133.1m and similarly at the NPAT line our forecast of A$8.4m sits well below consensus at A$14.1m."

Thank you for this information, @getready. This allows me to do my "what if" analysis to give me insight into what might happen to profit if revenue exceeds what is expected.

What if:

• Revenue growth for FY25 reaches 40% (this is quite conservative IMO based on actual growth rates over the last 5 years and allowing for Covid impacts in FY21 and FY22 not being repeated). Revenue would be $145.7M, 40% above Morgan's $104.1M for FY24. This is $20.5M above Morgan's predicted $125.2M in FY24.
• Gross margins remain at around 94% (this is also highly likely - I understand it was around 94% for FY23, but I have only been able to find this from a third party - can anybody point me to information on Gross Margin provided by Polynovo?). Thus, Gross Profit for FY25 would be $19.3M (20.5 x 94%) above what it would be if Morgans was correct.
• Morgan's are correct with its estimate of Operating Expenses in FY25 as part of its calculation of forecast NPAT. We do not need to know what it is as my analysis is only looking at what happens if revenue rises faster than what Morgans expects. If there is no change to operating expenses just because of the higher revenue (which I would expect), then the additional Gross Profit goes straight to the bottom line. Profit before tax would be $19.3M higher. Accumulated losses of $121M should mean very little is paid in tax. So FY25 NPAT should be $27.7M (Morgan's $8.4M + $19.3M).

This just goes to show how much a "revenue beat" converts to profit when Gross Margins are so high, assuming operating expenses remain the same.

The above analysis is my unchecked work, so please check for yourself before acting on it.