Smuggler,Using your backward-looking (no pun intended) approach,...

Smuggler,

Using your backward-looking (no pun intended) approach, here are my simple breakeven calculations based exclusively on the following numbers extracted from the 2007 results:

($'000)
Sales $11,060
GP $9,868
GP Margin 89.2%
Cash Expenses $14,974 comprising…
- Employee costs $9,709
- Underlying (cash) overheads $3,265
- R&D Costs $2,000 (recurring as stated in the report)

The implied cash shortfall is:
GP$ less Cash Expenses ($9,868 - $14,974) = $5,106.

The breakeven sales/revenues position based on the contribution margin of 89.2% is:
Cash Expenses / GP Margin ($14,974/89.2%) = $16,787

Given that Sales in 2007 were $11,060, the implied Sales/Revenue gap is therefore $5,727.

Now, if you also wish to cover what the company called its (cash) “one-off costs” in 2007 being:
- M&A $500
- Technology compliance $400
then sales will have to increase by an additional $1,009 ($900/89.2%).

The above calculations to not consider working capital adjustments, investing activities, disposal or acquisition activities etc.

Please DYOR.