Yep, revenues and cash flows are roughly the same, meaning the delay in payments isn't the issue here. On top of that their trade and other payables is only slightly below the AR - meaning their delay in payments offsets AR effect anyway. This concerns me a little as we had hoped that there was a delay between revenue and cash flow. All in balance there is no significant delay.
Cash flow statement is most telling to me - cash burn last year was $10 mil. How are they going to stem this, as according to their schedule, when the margins are persistently low?
They need to get the extra $17mil revenue booked urgently (they do maintain that they will achieve almost $20mil now which is good) but then what amount will go to cost of sales? Even if they increase their margins to 20% that will only provide $4 mil net to offset the cash burn and it will bring us close to needing another CR meaning further dilution. Margins still an issue here. Would love clarification on what amount of the COS is fixed and what is scalable. Hoping the fixed costs are very high because we will need margins of 50%, not the +90% we have been suffering.
Looks like they won't be achieving cash flow neutrality by end of year to me - and I thought it was supposed to have occurred already...
In light of this report my opinion is that the SP fall has been well warranted. Just wish I hadn't rode it down...represents much better value now.
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