You may be correct with respect to a missed deadline. Their announcement on 10 Jan19 said they were on target to achieve cashflow break even within 12 months. I think they will get close to this target this quarter but I'm expecting it to occur next quarter. Mind you they could achieve it but the quarter would need to be extremely good. Based on volume and the time of the year I'm putting the SP decline down to end of year selling and those selling now could be disappointed in a few weeks time and I'll explain my reasons now.
I'm expecting the quarter to be an excellent one with the potential to be stellar. In one announcement they said quarterly sales are approaching 2m AUD. In another announcement they said this quarter is the main one for ANZ market sales and they expect them to be good, no explanation was given, I expect it was based on how things were going at that stage of the quarter. I took the quarter on quarter growth they achieved last quarter and applied that growth to the previous second quarter and got around 2.1M AUD. If you do the same thing to the 3rd quarter the figure is extremely impressive, ( check it out for yourself, but both figures require the same sales growth continuing and of course that is not guaranteed).
What really got my attention though is this, and resulted in me increasing my holdings by about a third this quarter.
Recent revenue growth has been driven by the US market and it's a huge market. Previously the school districts they have targeted average 2K students. This quarter they targeted districts with an average of 30K and they said they had also started targeting larger districts and even whole states. With this in mind, if, they are achieving similar success with schools going live from trial then the increase in revenue could be massive. Marketing staff in the US is now at 9 plus there's the third party resellers that have access to otherwise closed markets, so even though this quarter is usually where ANZ schools provide the bulk of sales it could be eclipsed by revenue from the US.
Anyway they released a market update on 10th Jan 19 that included highlights of the quarter with the full quarterly being released on the 31st Jan. As such I'm expecting an announcement around this time in a few weeks that will tell us how we are actually going.
Also the arrangement where the BOD, senior execs and some contractors receive remuneration as share based as apposed to monetary finishes at the end of this month. I haven't seen an announcement where this has been extended or reverted back to money payments. I'm half expecting an announcement before the end of the CY as to whether it has been extended or is reverting back to money based payments. If it is reverting back to money I will take that as a bullish signal as share based remuneration was done to reduce cash burn. Also be aware these shares were voluntarily escrowed until the end of the CR so they can soon be sold on market.
Lastly don't forget sales form Indonesia through Telkomsel going from trial to roll out and paying for marketing. This was done after extensive market research and has the potential for a lot of revenue due to the size of the potential market. It was only rolled out this quarter and after it had started so I'm not expecting big figures here. Keep in mind that Singtel its a part of the Singtel group so success here could lead to roll outs across their other brands.
Also like @smuliyil I would love to hear other posters thoughts.
FZO Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
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