CL8

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1.3¢ carly holdings limited

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silverblizzard888

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22/03/23

20:59

Post #: 66909059
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Originally posted by Marvin_Mindreader: ↑

To really understand this I think you need to look a bit closer and combine assessment of P&L, cashflow and the investor presentations. Revenue was up $360k and expenses were up $260k (implying an $100k improvement). But on cashflow, taking operating cashflow (and also factoring in repaying principal on loans and leases), it went from -$1.76m to -$1.16m, an improvement of $600k. Of this, it looks like payables increased by $150k and receivables decreased by $140k, so net result is $300k improvement in operating cashflow. A decent improvement. As they grow, some of the payable will continue to grow so you get a permanent improvement in working capital, but wouldn't expect receivables to change much - most of the improvement was collection of R&D which happens once a year.

The last presentation also talked about the scale up in revenues through the vehicle acquisition stage (months 1-6 vs 7-12). Given the substantial vehicles acquired in the Dec22 half, it would seem that the real revenue run-rate will be more than double what has been included in the half year results (but all the costs are there). So this improvement goes straight to the bottom line in the P&L and cashflow. I think this is why there is the decent improvement in the Dec22 Qtr cashflows vs the Sep22 Qtr.

Looking at unit economics in the investor presentation, they tell us they made a monthly gross profit of $234 per vehicle in December (across both asset light and asset heavy vehicles). If you extrapolate that by 450 vehicles, you get gross profit of $105k per month (or $1.26m per year). We know that these vehicles are asset heavy, so they make more than asset light, so the real number will be more than that, but hard to tell exactly.

So basically this deal gets them about 40% towards break even on P&L (and even closer on cashflow). Do another asset finance facility a bit bigger than this and they would be getting reasonably close to break even. Asset finance deals tend to get easier when you are bigger. Lenders are more interested in funding $20-$30m than they are $5-$10m.

Personally this is the catalyst I was looking for.

Regards
Marv

DISC: I hold.

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Thanks for the indepth reply, I'll certainly give all their numbers a second look.

CL8 Price at posting: 2.5¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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Thanks for the indepth reply, I'll certainly give all their...

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