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Ann: Appendix 4D & Half Yearly Report and Accounts, page-55

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jimmycro

295 Posts.

16

30/11/16

17:14

Post #: 21003950
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Originally posted by jonkey1995 ↑

It is all about scale now. Fixed costs 80% to variable costs 20% from memory. Being cash flow positive shows fixed costs are well and truly covered. The more units added, up to our platforms capacity, will improve margins significantly, as the fixed cost is spread over more productive units.

For example, say the Margin is currently 15%. Therefore in $1 sale you would have 85c in costs. For each new unit above breakeven your fixed costs are covered, therefore your costs per $1 sale would be (85c * 20%) 17cents. That is around 83% margin. Adding new machines would push the actual margin up significantly. This is a race to scale and management are doing a great job bringing on new ATMs and potential large deals.

Before someone objects, I acknowledge that management may give better deals as fixed costs are spread over more machines, to win and retain new business. However, this is a good problem to have.

Cheers

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Gee that's a good post. Hope you're right Jonkey.

TSN Price at posting: 2.9¢ Sentiment: Buy Disclosure: Held
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