re: Ann: CFU Forms Partnership with Mitsui an...
(all figures AUD unless otherwise denominated)
haka, I've taken your advice and had another look at the half yearly report. Disregarding one-offs, the company is on a burn rate of around $1.1m per month. They have cash of $24m. $2.8m of that is apparently untouchable - a guarantee in relation to one of their government grants.
In the most recent quarter they went and sold EUR3m worth of equipment then leased it back over a 7 year term, to generate $2.5m cash. Maybe its just sound capital management but I can't help but feel that cash is reasonably tight.
Maybe ESPI is right they won't need to raise capital for 18 months but there are too many unknowns - what's the likelihood of significant sales before we run out of cash, what's the actual cost of production if an order comes through, what volumes are necessary to create positive cashflow?
I'm sure this is sounding quite negative but I'm putting it out there to try and balance the overwhelming optimism of this board. Then again it is a highly speculative stock (even if the technology is great) so I suppose optimism is called for! :)
Just keep in mind that every 0.5 of a cent the stock moves adds $5m to CFU's market cap (yes, there are just over a billion shares outstanding). Today we finished at $210m, $30m higher than Friday, with an intra-day high of $225m. All over one announcement of a test unit.
CFU Price at posting:
20.8¢ Sentiment: LT Buy Disclosure: Not Held
