That's absolutely correct, although this is a 4C so it doesn't give margins. We'll get that in late February.
They will be a lot lower vs PcP and many investors just won't understand why - that will/could be a buying opportunity
Because of how BCC make their money I don't see this as being "a rocket ship" that will bag over the next month. This will be a business that compounds and
will grow significantly over a long period of time with improving margins.
I wouldn't worry about the drop today. It looks like a few people have been caught out by the deceleration in operating cashflow, which came to $60k for the quarter compared to ~$160k in the last quarter. But the devil is in the detail...
- Last quarter BCC received $450k in jobkeeper/covid payments, which were a one off. If you take this out to see the underlying business, BCC would have broken their positive operating cashflow streak
- With the $450k inflow missing this quarter, BCC was also slowed down by an increase in staff costs. While I've had to increase my estimates in my model this is an investment in sales people to sell products/services, which was what the raise for. This is an investment in future revenue and profitability
- The other point to note is that zoleo subscription services have been EXCLUDED as they form part of the JV and will cycle through the accounts that way seemingly. At this stage I don't see this as a material number - I had about $500k for the half, so if you add it back in operating cashflow would be another $200k to $300k higher
Per my detailed post in the other thread I was clear that we would see some softness in 1H21. Outside of employee costs being about 20% higher than my expectations everything else is as it should be. They've paid back their high interest debt (as expected due to the CR) and they've significantly invested in people to SELL products. Meanwhile Zoleo won product of the year, which is huge.
THE BUY THESIS REMAINS INTACT.
