I feel the report (and the lack of commentary) is confusing for most people who don't have an appreciation of the accounting differences between a Cash Flow Statement and a Profit and Loss.
The dots point listed seemed to toggle between both.
Receipt of payments from Sales to Customers (are made on credit terms) so hence Receipts on Sales of 7.8m actually relates to some portion of the prior period and at best 2 months of the current quarter, assuming 30 days credit terms (which is probably unrealistic and is more like 45 - 90 days)
On the flip side manufacturing costs would include wages, juice and other consumables, including depreciation which have more than likely been brought to account sooner than the credit terms of the Sales to customers. Salaries for example of Production staff likely 2 weeks after they're incurred
Admin costs and office staff at the outer edge assuming on monthly salaries typically paid on the 15th of the month they pertain to.
So when they make P & L type statements being total sales was $10m for the period, yet receipt from customers were $7.8m, basically we're being told there is at least $2.2m in the pipeline as trade debtors, at least.
Then there is the debt, which from memory was paid down by $500K from Half Yearly ??, but they also stated $3.1m Cash at Bank, expressed as 5 quarters coverage (precisely at the 31st of May), but they've since raised another $3m of Cash and I feel it no coincidence that $3.1m in Cash plus $3m in additional raise is basically the same as the amount of Debt outstanding, $6.4m. My theory (I reiterate) is that they are working towards a different financing arrangement and basically can pay down the current loan, and may be called to with the Greensill saga playing out. So then there's the trade debtors in the pipeline, and probably if the CFO has earnt his first few months salary a different facility with drawdown and more competitive rates to switch across to.
YTD Sales was cryptically disclosed as $10m for the current quarter, and the Half Yearly reported $22m so that's already $32m in gross YTD sales versus last year's $42m (including sanitiser), so in my opinion definitely on track for more than $40m of sales., which on Price to Sales is yes well over 6c as a share price target.
As soon as the company come out and announce they have decoupled themselves from the Greensill debt facility, this will be received very positively by the market.
Future Sales and new product developments, I think they're being slowed down a bit because of:
a) the alternate debt facilities to be finalised and free up management from the "maybe we'll need this cash we have set aside"
b) there is no real incentive to accelerate sales and penetrations into other markets beyond a total yearly sales of Gross $38m. by this I mean there is no additional bonus bonus performance options for smashing the the current year's target. In fact smashing the current year will set a higher bar for FY2022 in order for perf options to vest.
Profitability of $284K EBITDA for the quarter is better than a minus number, but again we don't have visibility other than a Cash Flow statement which is not a P&L, but YTD EBITDA of $2.5m is much better than other years in recent times.
But to be frank, I am getting sick of pushing the barrow of EBITDA as a measure of success, I appreciate small steps and achievable goals lead onto bigger things, but really it has to be reflected as Free Operating Cashflow and NPAT.
I do expect the full year FY2021 will be NPAT positive and it may just be that FY2021 is being groomed for their big "Beat" announcement, by which time Financial Performance goals will have already been set.
Tony is well on track to get his full 20m of Options vest to him, they only need another $6m of sales between April - June for the second 10m to vest to him, as the 10m for EBITDA is already in the bag.
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