Originally posted by Nomadic_Investor
Sales were promising...but I'm still concerned about the cash position, despite their reassurances. In fact, even accounting for and removing the Hank acquisition, I really expected them to be operational cash flow positive in this, their peak quarter.
Looking ahead: predicted expenditure $2.2m next quarterly
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Remaining cash - $0.26m
Remaining debt facility - $1.235m
Debtors (A/R) - $0.3m (**just an estimate here from revenue less cash this quarter)
Next quarterly sales - ???
They
might 'only' need $400k in sales to keep the boat 'alive' but they would (read: should) no doubt want a buffer of some sort, especially with industry risks. Therefore, targeting $1m in sales is probably what they need (also accounting for the risk debtors may not pay cash in the quarter where revenue is recorded). In the same quarter last year they collected 225k in receipts and if you were to assume the 240% 'growth' they have achieved since then - would make it around $650-700k. Fairly tight in my view. What's more, the below (bold emphasis is mine) somewhat confuses/concerns me.
"due to the natural cycle of oysters....they generally become unfit for sale throughout January and February each year"
Is this not somewhat contradictory to their recent statement (bold is my emphasis) in the company update from December 12 that:
"peak demand exists.....over Christmas, New Year and out to Australia Day" and
"the company anticipates selling throughout December and January"
Maybe I'm missing something here? Easter in late April this year too (Q4)
They have about 1,5M yet to draw from their bank facility. This will suffice for 2 to 3 quarters I guess, at current burning rate.
