well appropriate that they release this as late as possible on a Friday......unfortunately for them, it's not a long weekend this weekend, else the likely negative reaction to this may have been forgotten
So they actually lost 5m operationally and then had to use the proceeds from the raise plus 4m additional loan from Blackrock (note original loan that was meant to be renogotiated last year still has not been renegotiated) which looks like it will become permanent.
The 4.8m they are getting in April is already accounted for in the crypto nonsense, so where is the money for the likely operational burn between Apr-Jun going to come from?
Someone has not thought this through very well
- those clients on fixed contracts are hedged, but presumably that hedge gain/loss (in terms of cashflow) is not aligned to when they have to pay for the wholesale cost and this has probably been one of the factors given the significant increase in wholesale prices
- those clients not on fixed contracts presumably pay 1-2 mths after LPE has to pay the wholeseller, so not only is there a cashflow mismatch, but it's likely that the margins are so razor thin that they have not priced in this cashflow mismatch, the AEMO deposit plus a host of other things
The gross profit after hedging seems to be in the 15-20% range (and closer to 10-15% without hedging), so they are going to need 100-150m in revenues at this pricing to cover their cost of ~$15-20m per annum.
Add to that their customer growth has come down significantly....you'd imagine with scale they would be accelerating, but where previously they were averaging ~2500 new customers per quarter, this quarter they only added ~900.
As
@madamswer said a little while ago, the only good option for shareholders seems to be if another retailer sees the value of 47k clients with a gross margin of ~15%, and being able to incorporate them into their existing operations. With the challenge in the energy space (at least in this part of the market), I'm not sure there would be any bidders even a low ball one.
Wonder if balckrock can do anything, because existing mgmt seem incapable of understanding the business they are in (I mean blaming AEMO for what has been a requirement for years in a business they have been in for >5yrs seems strange)
Rant over.....I guess how much lower can this go (and possibly a question now is what mechanism does the regulator have in stepping in should they not be able to operate financially......blackrock could pull all their funding, and my sense is the only reason they have not is that the 15m (now 19m) will be tied up with the regulator and administrators for years.....perhaps they are looking for a miracle just like us shareholders. Perhaps crypto biohubs will lead us to the promised land)
(20min delay)