By my simplistic reckoning, that puts the company as borderline EBITDA break-even, in the quietest quarter of the year. If opex is maintained at USD424k per month as it was across 2019, and if I take an exchange rate as A$1.00 = US$0.60, and if I allow a bit more to cover any cost increases (like advisory board expenses), then opex is likely no more than A$2.2m per quarter. And that is fixed - ie irrespective of revenue.
In Q1 we have A$5.3m revenue and A$2.07m in gross profit. This is prior to 1/2 yearly adjustments to COGS and hence GP, which are consistently written up (GP that is, as COGS is written down) after rebates and clawbacks are factored in. But putting that aside for now till auditors do their thing....EN1 would already be near EBITDA breakeven for the completed Q1. If Q2 is broadly the same or marginally higher (in revenue and/or GP terms) than Q1, then the platform is set for a good H2. Actually a great H2.
Basically, in Q1, the company has incurred a quarter of it's annual opex, and is borderline EBITDA breakeven when it is likely to have only posted one-sixth (or less) of expected annual revenue. Wow!
Of course, EBITDA is not net profit. And our biggest cost item between these two measures is interest. So very happy to hear that tier 1 banks and substantially lower APR finance is a plausible near term prospect. But that is not done till its done.
All that said....there is some uncertainty in the near term outlook due to Covid, and the back half of March did appear to reflect that. Without that uncertainty, Q2 could have reasonably expected between A$5.3m and A$7.0m in revenue. This is based on Q1 being 15% of annual totals and H1 being between 30-35% of annual totals. Of course, with the implied near term uncertainty conveyed...I await regular updates from management, to see how the company is tracking. A$1.55m in the first month of the new quarter, may be a great result. Let's see.
All IMO and GLTA.
EN1 Price at posting:
1.8¢ Sentiment: Buy Disclosure: Held
