Hi Boogie
Just browsing and noticed a couple of points / questions you raised in your last post that I didn't respond to. So in case you're still around..............
Re the statutory v underlying discussion. I take your point how some people prefer the underlying perspective and really each to their own. It's just that personally, I prefer the statutory figure because its 'clean' and sort of beyond dispute. And if I was over the top in voicing my displeasure with the 'underlying' approach, then apologies.
Re the apples v apples discussion..............
I queried the company about the figures when the forecast was first released and asked if the $1.8-2m was statutory. Charles confirmed it was. He also confirmed that the figure did not include Powereagle's 49% portion of the JV profits.
In relation the figures you would 'back out' to get the underlying figure (and these are my comments not the company's)............
I expect that company would continue its pattern of utilising SBEs. I don't know what they'd be for the upcoming year but in '14 it was @$700k and '15@$500k.
Tax breaks / considerations will probably be available again this year, I expect given the loss last year and possibly some unused favourable treatments via 'Powereagle'.
Re one-offs......
There will be plenty of them because of the first year's operation of the Joint Venture. Vmoto (not the joint venture) was responsible for the cost of moving the production line ($680k) to Shanghai. There would also be a number of 'people' related costs as I expect not all of the Nanjing employess would have made the journey to Shanghai. The company has also previously said that first year margins would suffer because of one-off / higher than normal fist year related operational costs.
The company also indicated that it going to start producing it's own 3 wheel vehicles by years and and there will be costs associated with preparing for that.
So by my guestimates that means the statutory $1.8-2m figure equates to an underlying figure of $4m or more.
And like I said, I figure this is a conservative figure (smaller the range, larger the level of certainty) and Charles did say the company was being 'prudent'.
In terms of why I am happier with the current situation compared to last year, I guess ultimately I'm comparing the $700k loss with the $2m forecast profit because I consider it to be the only 'clean' figure. But there's a lot of other stuff that I like about where the company is compared to mid to late last year and I admit some of this isn't quantifiable or scientific.
First of all the one-offs from last year were 'bad'. They were associated with the termination of a source of income/revenue. The one-offs this year are 'good' as they are/will be associated with the securing of long-term revenue source (Powereagle).
The company's deal with Saturna/Loop is materialising. Initially when announced the agreement was contingent on them listing and sourcing funds. They have now done both. They've started buying scooters and the company is looking at a long term contract which will generate
@2500 unit sales in 2017 and 6000 per annum after that. This deal also heralds the start of significant growth in the ex-China / Europe & American markets as well as the escooter 'sharing' industry.
Also Vmotos rear-wheel hub mounted engine has some advantages over the product being offered by mobs such as govecs (more conventional chain/belt driven engines). Fewer moving parts etc, less maintenance (Mr Hammond - Vmoto broke your rule. They re-invented the wheel too!). Pretty sure that success will breed success here for Vmoto in the 'sharing' industry.
Also related to this is the company saying they are going to launch their own 3 wheel vehicle later in the year and I hope/suspect that this ties in with the Japanese-client's plans (
http://www.rescgroup.com/ - check out the 3 wheel vehicle they show in their promotions. A 3 wheel version of the model Saturna/Loop intends using).
Their are other things too such as the European supermarket deal, prospect of more OEM work, etc.
The European supermarket deal sounds very promising as well.
Anyway, I hope that helps explain my perspective more clearly. I realise that we won't agree on everything but that's what makes this stuff interesting.
On last thing, Rene Rivkin (love him or hate him, he knew how to make money) had two major sayings when it came to investing on the stock market. 1. The first bid is never the last. 2. Watch what the directors are doing.
Pretty sure he would have liked Charles recent purchases.
Good luck and cheers Boogie.
(20min delay)