AN1 Quarterly Trends, page-20

A continuation of the usual quarterly analysis series, for the record.

The graphic below updates details of cash inflows and outflows.



Nothing stands out as being particularly notable. The trough in cashflows centred around 2Q21 may be Covid-19 related.

Previous announcements had indicated a QVC event for January, so the reduction in customer receipts from the December quarter is disappointing. The April QVC holds promise for an improvement.

Staff costs reached a record high, but allowing for the $0.24M paid to Halasz as a one-off they could be seen as unchanged.

With customer receipts alone at $2.283M the first sentence in the report may be confusing, claiming total Q3FY22 revenue and other income of $2.17M to be an increase of 121% from the corresponding FY21 period. Total operating cash income reported in Q3FY21 for comparison was $2.199M. In understanding the claim it is necessary to not consider customer receipts or government grants as part of ‘other income’.

Anticipated savings provided by changes to “the commercial approach to international market penetration” could be interpreted as an increasing focus on the local market. It also might mean that existing China distribution arrangements are unlikely to be expanded. The increasing emphasis on e-commerce sales appears to be retained.

The statement - “Cash balances remain strong and are expected to be sufficient until the return of group cash profitability” - is encouraging in it implies that a need for a near-term capital raise is not anticipated. I didn’t realise though that we had been in a position of cash profitability to return to.

We wait with bated breath on the outcome of the current evaluation of M&A and brand distribution opportunities. There appears to be a number of suitable local candidates as posters have noted a while ago. If no particular immediate demand for cash is anticipated then debt and/or shareholder dilution would seem to be the likely alternative currency to be used.

T7