Hi PortfolioPlus
Its certainly great to hear from a professional in the field. Law is not my area of expertise.
'Unbilled disbursements' I have my eye on, as you point out, is $89m ($67m current)
'Contract assets - work in progress' or WIP is over $300m ($181m current)
I appreciate the lumpiness of getting paid, running my own business, I have experience with that. I am paying attention to the 'current' portion of 'unbilled disbursements' and WIP. These are the assets that are expected to be converted to cash in the next 12 months. The total 'current' of these two items in the 2020 annual report is $248.8m. When viewed against the total revenue for 2020 at $183m, this number just looks gigantic.
Digging into 2019, the current unbilled disbursements and WIP totalled over $232m. One question to ask, is what happened to the 50m or so that was meant to turn into cash, but didn't? Did a portion of it rollover into 2020 current assets? which pushed 2020's figure to $248.8m? did the rest turn bad? I am not sure exactly what is going on here, perhaps someone with a better understanding can explain it to me, but there is an awful lot of current assets here that are expected to turn into cash in the next 12 months. What are they planning to do with it all? Thinking this through, I can't help but go back 7 years.
'unbilled disbursements' and 'WIP' current assets
2014 - $92.6
2015 - $116m
2016 - $129.9m
2017 - $155.7m
2018 - $186m
2019 - $232m
2020 - $248.8m
Wow. There's a picture. Lets look at that against total revenue
2014 - $115.7m
2015 - $150.9m
2016 - $151.5m
2017 - $165m
2018 - $179.4m
2019 - $177.9m
2020 - $183m
Notice that since 2018, 'unbilled disbursements' and 'WIP' current assets has exceeded total revenue. This clearly cannot continue, it is madness.
Either these current assets will go bad, which shouldn't happen as they have provisions in there, or it gets converted to cash at some point, which will cause a bumper year. Im certainly interested in learning anything I have wrong here and would appreciate any further insight.
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