NEARMAP LTD (ASX:NEA) - 2016 AGM Presentation - US Sales Update, 20717228, page-19 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by reg ↑

Thanks for your thoughts Goosmurf. While the door may be open to a CR, why dilute our ownership?

I don't think it is necessary or in the best interests of the owners. The three graphs on pages 16-18 illustrate the desire to hasten the conversion of a customer to cashflow +ve by ramping up the sales and marketing.

I'm interested to hear more detail about what was said at the meeting around these three slides, and what Patrick Quigley had to say re slides 33-41. Nachode, Goosmurf?

AUS sales team is at 23 FTE
US sales team is at 14 FTE. Should we expect the US number to double or treble in the next 2-3 years?

Reasons against a capital raising:
- earnings from Australia are reliable and growth has accellerated,
- at current cash burn we have about 2.5 years left,
- US will grow providing rapidly increasing contributions to cashflow,
- debt is cheap,

Reasons for a capital raising:
- satisfy insto demand in Aus/US,
- cost of debt may rise,
- economic and political upheaval may be on the horizon.

My wild guess is:
debt fund an extra $5-10m in each of the next two years to leverage sales and marketing in the US, the pg 18 graph shows the payoff is large. From there on in, the additional cashflow could be expected to sustain the additional demand for sales and marketing team.

Graphs and spreadsheets can show a lovely set of numbers, it is quite another to have a plan and execute it well. I agree with Goosmurf they give us good reason to feel confident they can deliver.

Thoughts appreciated

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Yikes, I didn't mean to imply that a CR was definitely on the cards, only that compared to previous years they have not categorically ruled it out.

Recall that at both 2014 and 2015 AGMs they very clearly stated "there will be no capital raising". This was not said this year, even though our cash continues to go down.

This year the message was "we have confidence in our ability to grow top line and manage our costs" and "we'll invest in sales and marketing where there's ROI".

The keyword from my earlier post is option to raise capital.

I agree that debt would be a cheaper option and should be readily available.

I do believe that there's sufficient cash to see us through to US breakeven. But I've no problem with them wanting to accelerate growth if they see the opportunity.

I wasn't privy to the Investor Strategy session. That was presented somewhere after the AGM.