Australia's largest stock trading and investment forum Australia's #1 stock forum

OJC

5.71%

16.5¢ the original juice co. ltd

Fantastic write up!These factors are holding me back from...

First 19 Last

Share
Profile

Follow
ma420

6,642 Posts.

1673

04/03/20

20:34

Post #: 43309208
Share

Originally posted by applesanddiamonds: ↑

Chris the future projected orders will no doubt boost the sp over the next month or so.
In regards to your comment about a 'quite strong half yearly report', I was very alarmed by a few numbers which, to me, raises a red flag for the local business.
Revenues grew from $15.1 - $17.9, modest for a start up with a flurry of new products but solid increment nonetheless.
However, Cost of Sales grew from $10.5 - $13.5. I nearly fell off my chair.
This means that for the $17.9 in revenue it cost them $13.5 to get this revenue.
This represents a Cost of Sales of 75%. At this rate they are giving the products away.
Said simply, for every $1 of sales generated it cost FOD 0.75c to get it.
Industry averages across a multitude of different categories in Consumer Product Companies would range from a low of 12% to around 25%.
(This will be well known to any posters who have had any experience in the consumer product industry)

For those not familiar, 'Cost of Sales' refers to the cost of deriving the sale. The majority of which comprise price discounts, rebates and incentives to retailers. ie Cost of listing the product on the shelves and placement on shelves etc... For the retailer, this 'Cost of Sale' is recorded in their financial statements as 'other income' and is an EXTREMELY important part of their own profitability. Annual trading terms negotiations will see retailers squeeze the manufacturer very hard to increase this % every year. In fact, retailer bonuses are paid based on their ability to increase this 'other income' year on year.

Moreover, not only is the % cost of sales extreme but it has grown faster than revenue period on period. This is alarming and not sustainable. Retailers will pressure manufacturers to maintain or grow this %. It is extremely hard to pull back from this as the retailer holds the balance of power during negotiations and it has been booked by them as 'income' for the previous period.

Finally, another number that was of concern to me was the Trade Receivables. This has grown from $3.4 - $6.2 over the period whereas the revenues have grown at a significantly slower pace. This implies that the retailers are stretching their payments as more money is outstanding and putting pressure on working capital.

Whilst I do not have access to the full P&L's and the details behind the numbers, I believe my comments are reasonable based on the numbers presented in their report.
In addition, the financials are consolidated so it is difficult to fully understand what costs are associated to the local business and with shipments to the China business.

Net, I have been a harsh critic of the local business from the outset and my sentiments remain.
The China business presents a very good opportunity but may have been delayed due to the virus.
Sanitizer may prove to be a very good income placeholder in the short term.

All imo, of course.

Expand

Fantastic write up!

These factors are holding me back from investing more.

FOD Price at posting: 9.4¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

LIN

Lindian shares jump on news of low-cost feasibility results for Kangankunde REE project

ITM

iTech lifts MRE at Eyre Peninsula Graphite Project by 300%

ASX Market Update: ASX200 in the red but real estate faring better | 1 June 2024

SS1

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Has uranium run out of steam? An update on nuclear markets & developments ahead in FY25

There are more pages in this discussion • 28 more messages in this thread...

First 19 Last

Add OJC (ASX) to my watchlist

(20min delay)
Last 16.5¢		Change -0.010(5.71%)		Mkt cap ! $48.88M

Open	High	Low	Value	Volume
17.0¢	17.0¢	16.5¢	$21.19K	127.6K

Buyers (Bids)

No.	Vol.	Price($)
1	66414	16.5¢

Sellers (Offers)

Price($)	Vol.	No.
17.0¢	232600	1

View Market Depth

No.	Vol.	Price($)
1	66414	0.165
5	244440	0.160
1	4000	0.155
2	166117	0.150
1	610	0.100

Price($)	Vol.	No.
0.170	232600	1
0.175	474711	8
0.180	97978	8
0.185	39076	3
0.190	125144	3

Last trade - 15.52pm 01/07/2024 (20 minute delay)

OJC (ASX) Chart

Fantastic write up!These factors are holding me back from...

Lindian shares jump on news of low-cost feasibility results for Kangankunde REE project

iTech lifts MRE at Eyre Peninsula Graphite Project by 300%

ASX Market Update: ASX200 in the red but real estate faring better | 1 June 2024

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Has uranium run out of steam? An update on nuclear markets & developments ahead in FY25

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Fantastic write up!These factors are holding me back from...

Top Stories

Lindian shares jump on news of low-cost feasibility results for Kangankunde REE project

iTech lifts MRE at Eyre Peninsula Graphite Project by 300%

ASX Market Update: ASX200 in the red but real estate faring better | 1 June 2024

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Has uranium run out of steam? An update on nuclear markets & developments ahead in FY25

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News