Ann: Vmoto's 2Q24 Market Update, page-32

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03/08/24

20:56

Post #: 75059412
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Originally posted by LommiMario: ↑

A quick look at the numbers.What's puzzling is the slight growth in cash position in the quarter of circa $2.6m, in a quarter that has not been particularly good, volumes wise.My understanding is that delivery of the factory has been delayed by 12 months.looking at the stages below only the $10m tranche would have been payable (April's). Costs associated with the thai factory are purely speculative since nothing has been mentioned. Otherwise circa $23m would have been payable in 2q24.Cash has gone up $2.6m in 2q24, which means in 2q24 vmt has generated $12.5m (if only one of the three tranches for the quarter have been paid; $25.7m of cash generated (fcf) in 2q24 if vmt stuck to the original plan and paid the three tranches.In the report VMT refers to operational cash flow positive, this would normally exclude capex, but it doesn't matter in this instance, because we are looking at total cash position.How to generate cash? One way would be to simply increase revenue, all else being equal. But volumes have been impacted, halved compare to pcp. Vmt refer to volumes though, not revenue, meaning revenue may have increased, contributing to the cash needed to pay for capex while increasing cash balance slightly. If other than bikes revenues have increase so much to generate enough cash to pay for the $10m tranche (let alone all three) it would have been material and reported. What the report says is that cash has been generated by expanding the debtors and creditors jaw. Additionally vmt could have generated cash by converting extra inventory in the quarter to align balance sheet to a subdued volumes environment. But even that has limit and couldn't have generated $20m+ in three months, since inventory wasn't that large. I could understand generating $10m from balance sheet but not $20m+ to pay for all three tranches in capex.Will need to dig deeper comparing last year's reports.

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I think you are wrong about the factory being delayed.

The photo in the Q4/23 update shows the foundations complete so the first 2 instalments $1.4m and $2.1 m would have happened in 2023.

The Photo in the Q2/24 update shows the roof on but the commentary says the external finishes are still being designed so Its likely that the third instalment of $2.1m happened in Q1 /24 and the forth instalment of $2.1m happened in Q2/24

The final four $1.4m instalments will happen in H2/24 and then the last $700k in Q4 /26 it seems with thigs going pretty much to plan.

I have been told If sales don't pick up they will lease the building. let's hope that's not necessary.

VMT Price at posting: 13.0¢ Sentiment: None Disclosure: Held
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