Ann: FY23 Results - Investor Presentation, page-3

Based on the FY23 accounts for Vonex and putting aside the auditors' comments, there are pressing concerns regarding its sustainability. The new CEO must implement significant changes to ensure the company's survival.

One potential advantage for Vonex is its expansive database, which might appeal to potential buyers. However, high churn rates and considerable debt raise concerns. I'm skeptical about the customer quality, especially since a significant portion came from the MNF acquisition, which primarily consists of smaller companies that may pose a risk of high churn.It's noted that their monthly churn rate stands at 1.5%, equating to 18% annually or a loss of $8.17m each year.

With the given interest payments and the Normalised EBIT, the company could potentially face more financial challenges unless they achieve substantial new business growth and cost cutting.

Here are some points from the FY23 results to consider:
>Normalised EBITDA: $5m on the faceof it seems a good result compared to others however under current has warning signs again.
>Interest Expenses: $2.4m
>Gross Profit (GP) stands at 44%
> 22,000 Customers Avg Spend $170 (based on $45m revenue) a month cannot be large customers base cross ell is hard. however lucrative if they can get it right.
>The 3-month churn rate is 1.5% per month, translating to an annual 18% loss at the current rate. This means a potential reduction of $8.17m with a net average margin loss of $4.57m annually.
>Combining the current EBITDA with the churn loss indicates a likely negative run rate of $2m. To break even, Vonex requires an organic growth of 10%, and this is before accounting for factors like amortisation, depreciation, share based payments or possible interest rate increases from renegotiations as result of pausing principal repayments.Immediate growth is essential, along with potential significant cost reductions.

Only Growth Story I can see
Cross Sell, All products are reducing in value due to competitive pressure a large portion of the base is micro from MNF acquisition
Driving Channels, they need marketing dollars for this.
improved retention they need to maintain staff or improves systems which costs money, The customer is spending $170 a month they need to automate.

Not sure if they can keep going. It will be a good CEO to turn this around.