Sorry HP but that’s simply a very pessimistic view based on very...

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Overboard888

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02/08/18

09:59

Post #: 34683686
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Originally posted by michaelhp ↑

To make my point in simple terms. I have concerns that the revenue raised was through methods that may not be viable. As a case in point. I know a woman who had a contact in China. It waas a very large gold company with hundreds of shops. She wanted to get her foot in the door wit this large gold comapny, so she used her contacts to get in touch and started selling gold. In the 1st 3 months she was selling about 1 kg of gold products to them. She made less than 3% margin and gave it all back on costs. The following 3 months she boosted sales to about 8kg and did this at zero margin - as she thought once had her foot in the door they would need her and could slowly increase margins.

Last I heard she was selling just under cost, to ensure she was the cheapest and was doing about 16kg of gold per month. She was losing about (equivalent) A$20k per month - but was still convinced that she would be able to get margins later...

Point of the story is that selling goods or services at cost price can show huge revenue growth - but it doesn't mean you are growing the business in a sustainable way. I would like to see proof that costs come down and revenues stay up in the next few reports - if they can show that then this is a winner and maybe I get back in.

I know my points being made are very simplified - just trying to ensure I don't confuse any of the newer investors here.

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Sorry HP but that’s simply a very pessimistic view based on very basic unresearced assumptions.
If you took the time to properly research you would be well aware that they are paying third parties for the transaction and settlement services at present.
Once this service moves in house (which it will) then margins will normalise.
This has been very well broadcast by the company over recent announcements and is certainly not a surprise.
If you took the time to understand GPTV and associated fees then you would understand the CONTRACTED recurring nature of this revenue.
I would suggest if you wish to succeed as an investor then you should expand your research capabilities .
I simply don’t see how you can become negative with the revenue growth shown and the fact the company is well exceeding targets.
Good luck all the same.

ISX Price at posting: 18.5¢ Sentiment: Buy Disclosure: Held
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