Too many people on here are looking at the 4C like it's the holly grail of the current state of the company....
There are so many flaws with reading into the 4C too heavily, the half year and yearly will provide a much better understanding on where this company is currently at.
I strongly believe with the cost outs and the continued growth, we should hopefully be at EBITDA neutral (or very close to) for the company as a whole this half year.
With all the new contract wins, these will heavily influence the 4C's and make them look negative, but (I believe) are for the greater good of the company. For example, lets say KTD wins a new $12m annual contract to start production in Jan on 90 day credit terms to the customer, then let's assume the contract does not renew at the end of the year - I would imagine we would be looking at the below scenario
Assumed 20% margin - 15% fixed costs, leaving 5% positive cash flow margin
At this stage of the business we are seeing a large amount of new contracts start - Coles last Q, Bar line this Q, Theland next Q....... hopefully the list goes on... so that's a tonne of contracts at the start of the below scenario
As below you can see the effects if we lose a contract, the capital comes flooding back in and would make a 4C look very nice - but hopefully that's not on the horizon.
(20min delay)