Ann: Trading Update, page-31

RBC Capital thinks cap raising is a possibilty.

RBC’s Wei-Weng Chen says Cettire’s continuous disclosure obligations likely forced it to make a surprise trading update given the “sizable miss” compared to consensus earnings expectations.

He says the consensus FY25 EBITDA estimate of $7.8m had assumed af $0.4m profit for 4Q, but in the first two months of the quarter, Cettire generated a $6.9m loss.

“As a result, EBITDA for the 11 months of FY25 was just $0.5 million.”

Beyond the soft trading conditions, with April/May down 21.6 per cent on-year, Mr Chen says CTT’s balance sheet is a “key concern to us.”

Cettire’s cash of $45m at the end of May compares to $76m in March.

After accounting for April/May operating losses and capex, Mr Chen estimates that Cettire’s working capital balance may have unwound by about $21-$22m in two months.

“Given how quickly CTT’s cash balance has fallen, our opinion is that an equity raise is not out of the question,” he says.