@eltr0n On first reading it does look better than expected, but...

@eltr0n

On first reading it does look better than expected, but as usual the devil is in the detail I just wish they would be much more open and informative to everyone than they are.

Personally I didn't think they'd make it to the quarter's end with a positive cash balance, but they did.

So how did they do it?

Basically it was down to the cost cutting measures they implemented and the deferral of the executives wages.

The question then is at what cost has this been done to the long term viability of the business?

If you've cut everything to the bare bone what growth opportunities do you have in the future?

Let's leave those questions for later and look at the other numbers...….

I wanted to write (until I read the fine detail) that Fox Gol had actually seen a really nice pick-up in gross revenue per transaction compared to the previous quarter from A$1.03 to A$1.26 especially when you account for the 10% currency headwind as well.

However while that's true going by the numbers, it doesn't account for Fox Gol previously being behind with payment to Syntonic from the previous quarter. Since they don't disclose the value, its very hard to gauge or estimate the true improvement in that metric.

Fox Gol transactions were up over 14% quarter on quarter and that was despite the Covid-19 headwinds in the last 3 weeks of the period.

The cash received figure is no-where near as good as it might appear, the December figure was down A$70K on the previous quarter due to delayed payments from TIM and Claro plus the Fox Gol amount I mentioned earlier.

So we actually have no idea how much those 3 amounts make up of the A$169,000 reported increase (or they may have exceeded that amount). The headline number of A$690,000 also includes payments from TLC in Vietnam (again we don't know how many of the 4 payments due occurred before 31st March or for what amounts either [4 payments within 3 months is all we know starting from the signing date which was pre 25th Feb]).

Sadly some of the above figures will affect what the actual gross revenue figure for the quarter that we can allocate to all the other Brazil content services we offer was

These other transactions grew by 11.2% quarter on quarter, which might appear reasonable given who bad Q3 can be, but it also contained at least 3 new app service launches and with no breakdown or detail in the report its hard to say what the true trends were.

What did standout is the gross value of those transactions, in the previous quarter it worked out at close to A$1.58 each compared to A$1.41 this time round (and that's before making any adjustment to allow for those other payments) against that there is the currency headwind to factor in as well and using credit cards instead of telco wallets (again a topic never touched on by the company as to how well it was doing).

Last couple of observation for now, outstanding debtors, the company keeps highlighting this yet the amount has barely moved. It was A$0.80M 31st Dec, A$0.89M 1st Feb and A$0.83M 31st March (we've no idea what our own outstanding trade creditors etc are by the way).

I'd draw everyone's attention to what said in the first paragraph of report under the heading "Financial Highlights".

There the company is effectively admitting that the Gross revenue figure is not what it seems and is a total waste of space.

In fact it would require that figure to be 2.5 times what it currently is on a quarterly basis for the company to be anywhere near break-even.

LOTM