Let's try again, this time as a stand-alone response.
Re R& D rebate... " I have done even better than you ask"
Clever. Change the point put forward / being argued and then challenge / dismiss the original conclusion. We are agreed that R&D spend is likely to continue as an integral part of Nuheara's brand and product development. You must surely acknowledge that the receipt of what appears to be an annual Govt grant will skewer the cash flow picture in the quarter it is received.
The only reason that I crunch the numbers (whichever way I can) is to challenge the strength of my investment. I am not looking for the best case scenario to justify my decisions or provide comfort. The nett result is after normalising the effect of the annual grant, the nett cash outflow extends from $786 k (Jan to Mar) to $ 1406 k (Apr to Jun).
Not to say that this is a bad thing, but it challenges those who believe that the latest quarterly confirms we are on track to be cash flow neutral or positive. Simplistic or fact ? IMO worthy of a caution.
Looking at patterns on expenses, comparing the Qtrly avg for H1 FY18 VS Jan to Mar VS Apr to Jun
R&D : Near double the previous Qtrly avg, fully expected with the launch of Boost and the future launch of Lives. Tick.
Advertising : The last 2 quarters have been low relative to the quarterly avg in H1. That said, Co continues to achieve priceless exposure through media channels. Nuh Mgt clearly managing this for max impact per $ spent. Higher spend indicated for next qtr indicated, so Tick.
Staff Costs : Last two quarters contained vs H1, probably through role optimisation and activity analysis versus workload. Tick.
Admin & Corporate : Essentially static last two qtr's and next quarter projection. Tick.
And now
Product Manufacture & Operating Expenses
Spend reduces from $1340 k per qtr in H1 FY 18 to $ 414 k (Jan to Mar). Half year results confirmed high inventory at 31 Dec, so IMO explained away the reduced spend.
One quarter on, the spend lifts to $881 k, this during the time when we know that a second product is brought on line. Irrespective of what percentage of the Initial Boost campaign's associated prod'n and operating costs contributed to this quarters spend, there is a big CAUTION in terms of the IQBuds portion. Are we still carrying inventory from Jan or have the unit cost to produce dropped that significantly, that the unit sold number is still on track (growing). The FYE results and accompanying financials should allow for greater clarity.
In closing, I think the relationship between customer receipts VS the the manufacturing spend will be a key indicator of whether the product/s are gaining traction. In monitoring this, we need to consider that Boost's inflate both the ave unit selling price and most likely the unit manufacturing cost, so in any measure of traction, we need to again normalise any comparisons so as to base traction on number of units sold.
And finally, we are in agreement on something. This will be a long journey. Looking at the comments of other posting, I wonder how many honestly are baking in say two years with lot's of frustration in between.
Enough for now.
Take care
Rokewa
NUH Price at posting:
8.4¢ Sentiment: Hold Disclosure: Held
(20min delay)