Ann: 2017 Financial Year Results Commentary, page-2

Big Un Limited (ASX:BIG, or ‘the Company’) is pleased to announce the release of its 4E preliminary results for the year ended 30 June 2017. BIG achieved cashflow positivity for the year, driven by $21.5m in cash receipts from customers and other sources (up 429% from FY16). BIG generated a $4.2m cash surplus from operating activities (FY16 $3.6m cash deficit). It is the Company’s policy to adopt a conservative approach to revenue recognition and recognise accounting revenue over the membership period resulting in a substantial increase in deferred revenues to $9.4m (FY16 $1.7m) which will be released over FY18.

BIG achieved accounting revenues for the year of $14.0m (up 429% from FY16) and a net loss of $4.2m for FY17, a significant improvement from the FY16 loss of $7.8m. This was a result of a strong improvement in gross margin to 27.4% (from a negative gross margin in 2016 of 33%).

Therefore, for the year ended 30 June 2017 the revenue recognised for accounting purposes is $9.4m lower than the actual cash collected. The consequence of this conservative revenue recognition treatment is that the cash surplus of $4.2m is reduced to an accounting net loss of $4.2m. In conclusion, the company’s business operations are healthy with a strong and growing operating cash margin.