ZNO 10.7% 3.1¢ zoono group limited

Individuals aren't allowed to give investment advice on...

  1. 18,418 Posts.
    lightbulb Created with Sketch. 1200
    Individuals aren't allowed to give investment advice on HC.
    Everyone has to form their own opinions regarding their investments & whether they should continue to hold etc.

    Cash can easily be manipulated in a quarterly report especially when you present items such as 'Net trade payables and receivables'.
    Delay processing payables invoices for a week at the end of a quarter & record them as accruals, or invoice customer orders in the last week of a quarter for shipments that may not be made for over 3 months (or even potentially cancelled).
    Or the opposite of above if you want to smooth out a good quarter when you know the next one will be bad!
    So looking at a quarterly movement in a busminess that has such lumpy business I don't believe is that helpful.

    With regard to cash receipts you also have to take into account that more & more customers will be getting credit terms going forward with a switch to direct large customers which will obviously delay cash receipts going forward.

    In the long run you can't avoid the reality of the situation so instead of looking at a quarterly movement maybe look at a rolling average of 4 quarters?
    The difficulty in that will probably be the lack of consistency in the 4C reports, which comes back to the issue people continue to raise.

    Look I don't have an issue at all about what level of detail a company releases in a 4C commentary so long as it adequately informs shareholders so they know what's actually going on.
    I have an issue with companies that only cherry pick good news about what is going well this quarter & not providing updates about previous highlighted good items in the previous ones.
    Because I know from experience with ZNO that if they aren't highlighting an area it's not going well, & omitting information leaves others believing that what has happened in the past is still continuing to happen currently.
    A prime example of this is announcing distribution deals with annual commitments in one quarter & then not notifying investors that they've failed in the next e.g Al Rabban.

    Why doesn't the company provide quarterly Revenue & Order numbers by region & sector (B2B/B2C/AH)?
    IMO because it highlights significant issues with the business regarding repeat orders.

    It's about being completely honest with shareholders rather than withholding information because it causes problems or additional work answering questions.
    For a company that has repeatedly stated it doesn't need to raise capital or monitor the short term share price this is a perplexing choice.
    Just put it all out there, let people analyse the information & make their investment decisions fully informed.
    If it's a business that is going to be 'project based' & cyclical rather than a 'continuous use' / non discretionary basis so be it.
    Or if it's a mixture inform people of the mix & use that to explain the results.
    e.g we have European facilties mngt companies that buy $2m of product a quarter on a monthly basis in Europe in B2B sector. B2B European sector generated $3m of Revenue in the quarter due to an additional $1m of sales from one off orders due to X.
    If repeat B2B facilties mngt companies orders in Europe drops to $1.5m a quarter due a major customer deciding it no longer needed to use the product going forward disclose it!
    I'm not suggesting infinite detail just a level of detail appropriate for material items to explain big swings.

    Because currently there is no clarity in why on the business has dropped off so much since H2 FY20, a trend that is still continuing. The $11m over ordering explanation in the FY accounts was just BS & didn't even stack up mathematically.

    Just as a side point I was told by the mngt in Jan that the 'repeat business' was approx $2-$3m p.m. I.e $6-$9m a quarter.
    How can that now possibly still be the case when ZNO generated $4.7m of Revenue in the last quarter including one offs from new agreements etc?
    Now I'm not saying I was misinformed but there is obviously a significant issue somewhere, either with the underlying business or the company's understanding of it's customers.


 
watchlist Created with Sketch. Add ZNO (ASX) to my watchlist
(20min delay)
Last
3.1¢
Change
0.003(10.7%)
Mkt cap ! $6.625M
Open High Low Value Volume
2.8¢ 3.2¢ 2.8¢ $18.64K 613.1K

Buyers (Bids)

No. Vol. Price($)
1 60000 3.0¢
 

Sellers (Offers)

Price($) Vol. No.
3.2¢ 45258 1
View Market Depth
Last trade - 15.33pm 03/05/2024 (20 minute delay) ?
Last
3.1¢
  Change
0.003 ( 6.90 %)
Open High Low Volume
2.8¢ 3.1¢ 2.8¢ 235438
Last updated 15.33pm 03/05/2024 ?
ZNO (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.