Thanks for your post Coal and gas. You raise some good points....

Thanks for your post Coal and gas. You raise some good points.

As you note, CSS is operating on fairly thin margins at the moment, so the company is exposed to a fall in the world price of its product and/or a substantial appreciation of the $A. That said, management has taken steps to drive down costs (eg. new processing plant) - that should help to improve their margins, all other things being equal.

The company has also indicated that it can scale up production fairly easily. Increased sales and production would probably deliver economies of scale (lower average cost), further improving their margins over time.

I take your point about branding but I have to say I was impressed with what they've done in this area. They are targeting the high end of the fish market where 'image' probably counts for something. I like their new marketing package, in particular their emphasis on the cold, pristine waters in which they grow their fish. This could give them a marketing edge over their competitors, eg. Huon if it expands its NSW experiment.

Even if you're right about a looming cash crunch, I wouldn't be too concerned. The company appears to be back on a stable footing and should have little difficulty raising funds if it needs to. I note it has around $8m in available financing facilities too.

I hope you keep posting on CSS - it's valuable to have some alternative perspectives floated around.