Happy New Year
@IceBreaker! and all other posters here. It seems you missed me
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As a New Year resolution, everyone should consider the best way of recovering capital. Is it in BUD, or are there better run companies with better prospects?
Now onto a brief analysis of this 4C.
- Year to date the company is not really cash flow positive. A well-run company can afford to pay its CEO and once you add back the foregone salary you end up with a negative figure.
- Revenue is not growing.
- Expenses are artificially low due to less than expected sales and the need to run down the oversized inventory.
- They still don't know how to report related party payments or DM has convinced James Nelson and Paul Russell to forego wages to make his reporting look better.
- The most worrying item was the $410k borrowed from one of the unsecured shareholder loans. This could be a sign they are at the LVR limit of the PFG revolver and are having cash flow issues.
I expect another massaging of the books in Dec, followed by another possible fools gold announcement early in the New Year when terms go back to 60 days and a double-hit of cash arrives. From then on, I expect flat sales will see the company fall back to loss-making.
If this is as good as it gets, it's pretty concerning.
