I think that your hypothetical figures demonstrate the art of the possible, but it is a highly optimistic scenario.
70% topline growth (compared to an average of 45% over the past 3 full financial years) is fully realistic, but growth always comes at a cost. Hence, why loss-making companies are always tapping the market to fund their growth stories.
When you also start to account for things such as a reduced RKN dividend and other business costs, it seems pretty clear (to me at least), that the odds are against NOV being cash flow positive.
"The CEO has mentioned recently that he expects to be cash flow positive in 12 months."
@SkyLimit - do you know when this was mentioned? Source? Sounds like a vague statement which they will backtrack when it isn't met; blaming delays to banking license and investing to grow. Otherwise, why not formalise it within an ASX announcement where the market would take note? The last 4C maintains that the priority is topline revenue growth. No mention of getting cash-burn under control.
"A large portion of our current cash burn could really be considered an investment in the banking license".
@WhatsupwithBas - This is a fair point. Working with the banking regulator is definitely consuming resources. However, I doubt it equates to $6m pa.
It is the job of any exec to boost confidence. This is why they make vague statements, leading holders to arrive at optimistic conclusions. None of this is specific to NOV, it's just how the game works.
I look forward to analysing the next few quarterlies. Once they start to demonstrate the path to profitability, I think that the market will start to take a real interest in NOV.
