For me, this announcement is a considerable upgrade.
I thought they were only just going to beat 1H19 ($4.7m), not just miss 1H20 ($11.3m).
It seems more likely based on this latest announcement it is going to be closer to $10m than $5m.
I think a slight reduction in revenue will still actually yield a stronger profit result for the half (>$5m) because:
1. Cost savings that weren't implemented last year, such as in-house lab testing (prev. stated to be $100k per month), solar power etc.
2. Eligibility for JobKeeper (they collected nearly $300k up to 30 June so we can assume something like $500k over this 6 month period). Another way to look at it is, they've basically been running the factory with little to no wage cost (or energy costs?) probably.
3. A higher mix of Alusion revenue which is higher margin than ZinClear product range.
They had this to say about Alusion just some weeks ago in the annual report:
So I assume the
expansion into new markets is going really well. We've seen near endless use-cases for this material outside of cosmetics with some very big companies, so I would not be surprised to see this gain similar growth trajectory of something like 3-4x. I thought they had capacity in excess of 250 tonnes per year and aggressively growing it, so we're talking some really big dollars. Alusion line has the potential to even outpace ZinClear growth and earnings.
The prospects of the next summer seasons are looking pretty solid. Given stock is now available locally in USA, when sales peak may be closer to the summer season than we are used to given they've effectively eliminated 3 months of wasted transit time to customers. Music to my ears, when I've previously been given delivery dates from other competing suppliers of minimum 16 weeks just to get samples. I think some may get caught out thinking sales have slowed when in reality, ANO is just making themselves even more and more attractive to customers in USA. Being listed on the NASDAQ will probably help that reputationally too.
A bright future. Don't be fooled IMO.
(20min delay)