Thanks for that Robin. With so many junk posts on HC its refreshing to see someone actually go through the company report.
Looking through last years income statement, employee benefits totalled 108.9m. The other major cost was depreciation and amortization and finance cost. I take it depreciation is not something that requires cash so we are left with what I would call 'fixed costs' of 12.4m for finance and 109m for employee wages etc so that is around $122m fixed costs for the full year.
The other major cost I have not included in fixed costs is operating expenses. This consists of marketing, technology and operating expenses of about 106m. I assume these costs can be lowered significantly.
Assuming 9 months at 80% of normal volumes for this financial year and 3 moths of 10%, gives full year revenue equivalent of 7.5months of 100% of business as usual (BAU) revenue. With a slight reduction to the operating expenses, WEB will still make a slight positive EBITDA in this scenario. I think this scenario is fairly conservative as i hope that even with the shutdown their revenue is more than 10% of BAU and also I think that 3 months from now the restrictions will start being lifted.
If the shutdown carries on for 5 months with only 10% of business as usual revenue, WEB would need to fully draw the finance facility to meet the costs. Anything more than 5 months to 6 months and WEB will be in trouble.
It is a risk but I cant see a total travel ban like we have in place right now to carry on for more than 3 months.
There are a lot of assumptions in my very simple calculations e.g I have used last years figures... but this is also conservative as the dollar difference in the revenue and cost would have been higher for this year.
(20min delay)