From my reading, they expected to increase WC up until May. Then...

From my reading, they expected to increase WC up until May. Then they'd see 40% paid upfront (enough to purchase raw material), and the remaining 60% paid 90 days after the customer receives it, with the bulk of it to be in by August/September. Instead, we're seeing peak WC sooner, so they'll have excess cash by EOFY.

Keep in mind, Lev likes to return cash to shareholders (see TWD history), and this is the most tax efficient way to do so at this point (no franking credits).

As for the CR;@throwerw is right - at the time it made sense. They could not have forecast impacts from COVID-19.


On Aluminium oxide - they're limited to whatever Merck can sell. Merck won't agree to higher minimum volumes, so they won't increase capacity significantly. Exclusivity runs out in April 2024 from memory. Luckily, ANO are no longer desperate for cash, so they have more bargaining power should they wish to extend that agreement.

Given management's ability to manufacture cheaply and the size of their chemist network, I'm guessing they push this through disties that care about the relationship with ANO (like Devereaux). Seems the better option, rather than extending. But I'm basing that on limited information.