Coming back to the 4C reports. This is what I will be looking for in the next update.
- closing of the commercial business outflows gap ahead of the last CY qtr.
- conversion of cash to inventory ready for end of November (remember no air freight promises)
- update on the work and investments by the team - 70-100% yoy growth (with orders not promises)
Add to that If the SPP goes through in full with a combined cash injection of $11.1Mil (part CYQ3 and part Q4), We should hopefully see a large jump in cash or inventory (but not as a result of organic business growth though.)OPERATIONAL COMMENTARY OVERVIEW This Q4FY19 is the first full quarter of combined revenues for the Company following the successful acquisition of LIFX in March. As is quite evident, the result has been significant increases in revenues and receipts (and of course expenses and outflows too, although pleasingly, disproportionately smaller percentage increases in the latter case). In the Q3FY19 commentary, the Company announced a restructuring and cost-cutting program at the parent (Group) level and specifically the CommercialDivision (Buddy Ohm, managed services and Buddy Cloud). In early June it was announced that the targeted reduction in net cash outflows (to A$1.2 million per quarter) was achieved, and in fact under the leadership of Commercial Division CEO Travis Gerber, the business achieved slightly greater revenues and slightly lower expenses than budgeted. Notonly does this place the Commercial Division on track to meet their target ofcash flow break-even by the end of CY2019, but is a very strong result given the disruption to that business following the restructuring and cost-cutting. The ConsumerDivision (LIFX consumer lighting) continues to grow, with the business ramping up for the holiday period (calendar Q4). The success of CYQ4 will be dictated by the work andinvestments made by the team in CYQ3 - and even major selling events such as the Black Friday/Cyber Monday holiday weekend at the end of November are being planned and executed right now. Pleasingly, the Company’s current assets are only minimally changed from last quarter as reductions in cash and receivables are offset by increasesin inventory. Thecoming August-September period is typically the “cash low point” for thebusiness, after which increasesin revenues, receivables and receipts continue through to the annual holiday period and just beyond.
