The issue with the business at the moment is the high outgoings on staff and admin and the delays in receipts. Luckily we have hopefully seen the majority of delays in 2019 and 2020 should be a lot smoother sailing with a lot more cash receipts to see us through 2020 and 2021 without too many issues.
Post 2021 though i see some queries. It is very tough to see ongoing EBITDA with $40mil of outgoings in staff/admin fees. I can't see them doing enough sales in SPS and recurring revenue coming in to off set this.
The company needs to put a knife through their outgoings. They really need to go over all staff costs and get rid of unwanted sections of the company that we inherited from RWL.
I don't see why we can't manufacture most of the products out of China where work is cheap and ship from there.
If the company cannot cut these costs by at least $10mil to somewhere between $25-$30 per year we will struggle. However if they can then we have a streamlined business which should grow and great products to make decent $$$ going forward.
FLC Price at posting:
37.5¢ Sentiment: Hold Disclosure: Held
