PPK (ASX) Ann: Half Yearly Report and Accounts

Originally posted by kenjikool: ↑

So can someone tell me where I'm going wrong here?
To estimate the company's likely revenue over 12 months based on your 39% share of a $1,972,000 profit for the first 6 months, we need to make some assumptions about the industry context and financial structure, as profit is a function of revenue, costs, and other factors. The body armor industry, particularly with government contracts, tends to have stable but variable revenue streams depending on contract cycles, production costs, and profit margins. Here's the breakdown:
Calculate total company profit for 6 months:
You own 39% of the company, and your profit share is $1,972,000.
Total company profit = $1,972,000 ÷ 0.39 = $5,056,410 (approximately).
Estimate annual profit:
Assuming the profit rate is consistent across the year (a simplification, as government contracts may have seasonal or delivery-based variations), the annual profit is:$5,056,410 × 2 = $10,112,820.
Estimate revenue using industry profit margins:
The body armor industry, especially with government contracts, typically operates on net profit margins of 5-15%, depending on factors like economies of scale, material costs (e.g., Kevlar, ceramics), and contract terms. For this estimate, I'll use a conservative 10% net profit margin, which is reasonable for defense-related manufacturing.
If net profit is $10,112,820 and represents 10% of revenue:Revenue = $10,112,820 ÷ 0.10 = $101,128,200 annually.
Considerations for government contracts:
Government contracts often involve large, irregular payments tied to delivery milestones, which could skew profits toward specific quarters. If the first 6 months included a major contract payment, the second half might not scale linearly. Conversely, if contracts are evenly spread, the estimate holds.
Body armor companies (e.g., Point Blank, Armor Express) often have high fixed costs (R&D, certifications) but stable revenue from long-term government contracts, supporting the assumption of consistent profitability.
Adjust for uncertainty:
Without specific data on the company’s cost structure or contract schedule, a range is prudent. Using a 5-15% margin:
At 5%: Revenue = $10,112,820 ÷ 0.05 = $202,256,400.
At 15%: Revenue = $10,112,820 ÷ 0.15 = $67,418,800.
The likely revenue is thus between $67.4M and $202.3M, with $101.1M as a midpoint estimate.
Final Answer: The company’s likely annual revenue is approximately $101.1 million, with a range of $67.4 million to $202.3 million, depending on the exact profit margin (assumed 5-15% for the body armor industry with government contracts). For a more precise estimate, provide details on the company’s cost structure or contract payment schedules.

However, lets say that CIB is doing really well and make around 25% Profit margin. Suddenly we get to my ballpark figure of $40 million revenue....

To estimate the company's likely annual revenue with a 25% profit margin, based on your 39% share of a $1,972,000 profit for the first 6 months:
Calculate total company profit for 6 months:
Your profit share is $1,972,000 for 39% ownership.
Total company profit = $1,972,000 ÷ 0.39 = $5,056,410 (approximately).
Estimate annual profit:
Assuming consistent profitability across the year, annual profit = $5,056,410 × 2 = $10,112,820.
Estimate revenue using a 25% profit margin:
If net profit is $10,112,820 and represents 25% of revenue:Revenue = $10,112,820 ÷ 0.25 = $40,451,280 annually.
Final Answer: The company’s likely annual revenue, assuming a 25% profit margin, is approximately $40.5 million. Note that government contracts in the body armor industry may cause revenue fluctuations, so this estimate assumes consistent performance. For greater accuracy, provide details on contract schedules or cost structures.

Expand

3.
Question to get 10% of X why are you dividing it by 0.1? You should be multiplying it by 0.1

10% of 10,112,820 = 1,011,282

Same issue I see throughout or am I misunderstanding the percentage you are trying to derive?

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(20min delay)
Last 47.5¢		Change 0.010(2.15%)		Mkt cap ! $43.13M

Open	High	Low	Value	Volume
46.5¢	47.5¢	46.0¢	$390	845

Ann: Half Yearly Report and Accounts, page-9

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