There hasn't been a black and white announcement but it's not hard to come to that conclusion from what has been disclosed .
(1) The New Factory announcement is the first clue.
"Flexibility to co-locate some key strategic suppliers within Vmoto’s manufacturing facilities for improving
efficiency and quality control, also generating rental income from these suppliers."
(2) That statement answered two Questions for me
(a) Why do they need a new factory for production of 300,000 units when they already have one.
(b) Why did rent receipts jump from $512,000 in 2022 to $1,015,000 in 2023 when sales were falling and The manufacturing JV that leases part of the factory was struggling.
I conclude rightly or wrongly that they are already leasing a big proportion of the existing factory to parts manufactures which has reduced the capacity given the upcoming product mix to 150,000 units per annum.
Given that they have expanded distribution into SE Asia, South America and MENA coupled with an unofficial forecast of sales rising to 120,000 units a year the decision that "we need more manufacturing capacity by 2026" makes sense.
The fact that the European market crashed removed the urgency but also put unprofitable growth stocks in the hands of the liquidators when capital to fund their losses wasn't an option. We lost GreenMO's contribution to sales temporarily but were able to buy Super Soco's patents for a song because we already owned the rights to manufacture and distribute the products.
The forecast losses for this year means VMT will enter 2025 in a very strong position with a full suite of VMT branded B2B and B2C products, a solid reputation, a massive distribution network, a production capacity of circa 300,000. rental income of circa $2m right when inflation is forecast to come under control and interest rates are forecast to fall.
A lot to like at 11.5c a share
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