The annual revenue for FY20 was terrible and fell far far below the expectations in late 2019, as well as the tempered expectations of early 2020.
Then expectations were adjusted down further again for COVID - but from that low level I think I can finally say its looking a little bit better than I'd expected.
The ray of light that I could see in this is that Q1 FY21 is beginning to tick upwards. My focus in on pages 14 to 16 in the presentation.
The report gave sales for July and August and they are pretty good considering, they almost as much as FY20 altogether.
I did a simple analysis of 2 scenarios, nothing special, which i'll share:
First I noted roughly how much revenue to expect if the sites were all operating as contracted, to give a conservative upper bound on annualised revenue. It would be about break-even level.
I also made an estimate of what would happen if there was no growth beyond what I'm expecting for Q1 - this would be a disaster - but it must be admitted that should the US covid situation spin out of control again this winter, this would probably be the result.
The next scenario is what would happen if unit sales increased only by 35 per month, month on month. This is reasonable, especially given how many labs are still not operating, and we have seen these levels have been occurring since June. This would see rev growth of about 600% for FY21. Additional CR would be required but it shouldn't be a problem to raise compared to this years raising. There's no new sign-ups included and even still there is space for growth at the end of the year compared to the upper bound established earlier.
This is my conservative base case and its good enough for me. I'd be surprised if there wasn't a small but respectable capital gain on such results.
The second scenario was engineered to achieve the ~1000 units per month required to reach break even. It once again assumes no new sign ups. Its fair to not include these because of the covid situation and the long lead time for them to become operational anyway. This would require an 85 increase in sales volume per month, month on month. I'm not really expecting this, but its not entirely unreasonable given there
are contracts in place. It is easy to see that these results would do a lot of good for the SP by end of FY21 if they eventuated, especially if there were a vaccine by then as well as some new lab sign ups in the pipeline.
Both models give revenue of around $300k to $350k for end of Q1 this year. To me $350k would be an extremely positive sign, while much below $300k not so good... unless it was tied up in AR. Results of ~$300k for the Q compared to last years ~$400k for the year I think should be received well by the market either way...
So I've picked up more again since this announcement and am definitely curious to see how the quarterly turns out.
