Ahhhhh another one! It's a lazy research update with a 50% risk...

Ahhhhh another one!

It's a lazy research update with a 50% risk weighting thrown in. Why now I don't know???

It basically comments on headline results.

But where is the actual research to back up the growth prospects? We are told there's value in the telco deals, in the payment platform, marketing channels etc etc. Why not have some stats/facts on the sector and the market they operate in. Some substance that the market can measure the business with?

Comments around the marketing expense are ridiculous as the majority of the increase obviously comes from the acquisition. However increased marketing in total dollar terms is the revenue driver going forward.

FY 17 Debt payments are reflected in the report. From my veiw it is calculated at 10 monthly payments of the cash cap. Sept-June incl. (-$6.62m change in borrowings)

The A$18m debt still outstanding looks scary, but by my numbers there will be $14m drawn maximum by this stage. (Using cash payment workings) Keep in mind debt and majority of earnings are in Euro. €11.8m + €4.9m.

In my veiw the reports Fy17 Current assets at $27m with only $2.9m cash (WC) and the $3m on deposit to meet covenants (cash equiv) are a very simple calculation demonstrating that it can take up to six months to receive payments from the telcos and demonstrates that need for growing WC. On top of this they obviously require the marketing expense up front.
It doesn't look like it is actually taking six months but worse case could have upto $20m receivables outstanding at year end FY17. But no drama as bad debts are very small, ($370k FY16 and could be due to change of ownership)


Key for me is to keep that cash rolling in, work at that debt, but don't pinch growth in the meantime. 2HFY16 was $3.7m FCF. If they can maintain this in the mid term I would be happy.

Maintain that 25% ebitda margin.
Build that tech team.
Then work on that NPAT number.
No more re-finance costs and free options please.
Current assets vs current liabilities FY18 looking much, much healthier.