https://hotcopper.com.au/threads/its-over.4002109/page-246?post_id=35297609#.W44Xik8UmAg
Last week I posted the above highlighting the losses made by the 3 tech stocks - LVT, LVH and BRN
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
| 0 |
Stock |
Revenue FY18 (mil) |
Revenue FY17 (mil) |
Chg% |
Loss FY18 (mil) |
Loss FY17 (mil) |
Chg% |
| 1 |
LVT |
$ 5.70 |
$ 1.80 |
217% |
-$22.10 |
-$7.40 |
199% |
| 2 |
LVH |
$ 1.65 |
$ 0.78 |
113% |
-$10.10 |
-$6.14 |
64% |
| 3 |
BRN (USD) |
$ 0.51 |
$ 0.13 |
280% |
-$8.77 |
-$4.65 |
89% |
The software business is people intensive to develop the requisite software platform and therefore wages and salaries represent the bulk of the costs. Failure to rein in the escalation of these costs would mean an extended period of losses and continued share placements or CR which LVT recently did to the tune of $25m last month.
Going Concern
For the year ended 30 June 2018, the Group made a loss of $22,058,984 (2017: $7,394,511) and had net cash
flows used in operating activities of $18,143,630 (2017: $4,496,274). At 30 June 2018, the Group had a cash
balance of $17,848,223.
The Directors are of the opinion that the Group will be able to continue as a going concern, supported by the
$25,000,000 share placement announced by the Group on 9 August 2018. Net proceeds from the share
placement of $23,625,000 were received (net of costs) on 13 August 2018.
But take a closer look at how LVT had expended its wages bill last year.
The increase in revenues of 221% may have excited the market but employee expenses grew by 183% as well and in dollar terms the increase in wages related expenses was $11.34m more than 2.8x the $3.9m in annual revenue increase. AND they paid $2m in commission and bonuses (really warranted with business losses?)while directors also had a good pay day (its 3 key execs took home$2.7m between them ). There is also a question on why contractor expenses had ballooned and whether this is variable to the scale of the business because if it is, then the business margins from subscriptions are poor.
As I mentioned in my earlier post, the path to profitability for LVT is unclear. Management IMO is clearly not prudent in its hiring and compensation policies or it may actually reflect the substantial costs of maintaining an operational team that is growing in numbers to support the growth of its business. I had indicated that LVT sp would likely head south should it break 61c support and the support has clearly been broken with possibly further declines ahead.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 0 |
LIVETILES |
|
|
|
| 1 |
|
2018 |
2017 |
Increase% |
| 2 |
Revenues(mil) |
5.685 |
1.769 |
221.4% |
| 3 |
Directors Wages |
1.521 |
1.284 |
18.5% |
| 4 |
Staff Wages & Salaries |
6.766 |
2.5197 |
168.5% |
| 5 |
Contractor expenses |
5.143 |
0.76 |
576.7% |
| 6 |
Commission & Bonus |
2.066 |
0.78 |
164.9% |
| 7 |
|
15.496 |
5.3437 |
190.0% |
| 8 |
Other employee expenses |
2.033 |
0.845 |
140.6% |
| 9 |
|
17.529 |
6.189 |
183.2% |
