Cash is tight, and even though they reported a positive cash flow quarter, the ball and chain inherited is holding this growing business back. Syd01 and Mel01 leases alone drains $330K P/Q. 2 warehouses storing $8.6M of assets, generating $0 return. I understand mickey1979 and other frustrated investors that were there from the start. A $16m budget to build 2 DC at $2.7m each that blew out to 4.3m each, requiring additional capital of $10.3m(26.3in total). Budget blowout of $3.2m(60%), Project schedule delays, unsuitable location for DC energy requirements at Mel01 and left a debt of $3.3m. Well over $2mil, $65K p/m in 3years to lease Mel01, was it a $10mil property returning 7.5%pa, interesting mickey1979. I think Mel01 lease expires 3/21. What about the Syd01 lease. $540k p/a, 3/22 $950k p/a. Clearly the research into Sydney/Melbourne's DC growth/demand exceeded the original business prospectus from 2017. You think Syd01 and Mel01 DC were hot property with the amount of potential racks they installed. Minimum 5%-10% should of been presold. Have they filled the 58 racks at Syd01 DC that went live in 8/19? 84 is the break even price. 116 available. Tas01 has 30 racks, $2.7m asset, EBITDA $450K, 16.7% annual return.
DXN Price at posting:
1.6¢ Sentiment: Hold Disclosure: Held
