"Underlying 2H EBITDA was more like $2.4m (noting 1H was $1.8m, and FY was $4.2m). Where do you get $3.2m?"That first half EBITDA figure of $1.8m, which does not include share-based expenses. was from management's interim result presentation,
But I think excluding share based expenses is total nonsense, because they reflect a real cost to the company (in fact, in my view they are a worse cost than if those payments were made in cash).
Therefore I include share based payments in my determination of EBITDA, in which case first half EBITDA was $0.975m (off which I also deducted the $0.154m on Other Income in order to derive a pure operating EBITDA), so around $0.82m is my raw number:
View attachment 6420477Anyway, this is all a bit moot, because EBITDA is a really crappy, and often very misleading, financial metric and is subject to all manner of misrepresentation and misinterpretation
Which is why I derive my valuation cues mostly from Free Cash Flow generation.
By way of demonstration, in CCR's case, the company generated
positive FCF of $1.1m in FY2024 ($0.4m in first half, and $0.7m in the second half). By comparison, the equivalent P&L metric, i.e.,
Pre-Tax Profit (the company neither provides for, nor pays, tax) was
minus $4.6m.
So, for those investors who own shares with a business owner mindset (i.e., who look at cash flows, and pay no mind to the sorts of accounting alchemy often inherent in P&Ls), CCR's P&L significantly understates the true financial performance of the business.
The reason for this discrepancy is to be found primarily in the Amortisation line, where Customer Contracts are being amortised at a rate of around $3.8mpa, which is clearly a non-cash element:
View attachment 6420522As can be seen, the residual balance is $7.664m which, at the current rate, will be run down to zero at the end of FY2026 which means that - all else being equal - the P&L thereafter will receive a magic $3.8m boost as this accounting oddity ceases. It is clearly a nonsense accounting quirk, but that's what these sorts of GAAP-type practices require.
So, if one wants to think about CCR turning a maiden profit, well then - adjusting for the excessive amortisation discussed above - the company is about there right now.
But it will probably only formally report a maiden profit in June quarter of 2025.
Like I said, a nonsense accounting quirk.
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