I do agree with Bundy on points on optimism as it is frustrating...

I do agree with Bundy on points on optimism as it is frustrating looking at Hotcopper to hopefully see some constructive insight but only see short-term outlooks and positivity based on the US futures markets. That said its hard not to get caught up in it when there is so much invested.

Iv re-crunched some numbers and personally, i don't believe we are overvalued yet and see an 50% increase in SP is still a very realistic possibility from the current $40M m/c.

This is just my view and I apologise for my very rough figures. Iv tried to get as much info from company reports and Gleneagle but some is my personal predictions.

So the company already said the new orders are for the lead up to the upcoming Christmas and back to school period. Sales of 18,300 are very realistic which equates to 15,000 sold through JB's and 3,300 sold through all other channels with the extra 5,000 watches on order for November as restock.

It not unrealistic for JB's to forecast sales of 15,000 watches considering it would only be an average of 75 per store (or 6.25 watches per week from the start of November 2018 to end of Jan 2019). Even if you think this is high lets remember there will be a massive uptake on JB's online platform what isn't included into the equation.

As per the Gleneagles May 2017 report
Estimated manufacture cost:
Low volume- $100 per watch
High volume- $75 per watch
Estimated wholesale price to large B&M:
Slightly above $200 per watch
= approx $125 gross profit per watch

Sales of 18300 watches (3 months of sales to EOM Jan 2019)
Revenue $3,660,000
Gross Profit $2,287,500

"• We upgraded our market size expectations from 3,000 to 10,000 units per annum to 120,000 – 180,000 units ($30 million to $60 million per annum - Australia only) based on independent research by Gartner1 and after leading Australian bricks and mortar retailers recommended management to accelerate its rollout strategy and aim much higher to achieve mass market take up and leadership."

Based on JBHIFI and advertisement campaign i think 25,000 watches sold by EOFY would be very realistic.

Watch sales on 25,000 units
Revenue $5,000,000
Gross profit $3,125,000
Recurring app revenue @ $3.6 per unit p/m
@ 28,000 = $1,209,000 per annum
School business
Revenue $2,300,000
Gross profit @ 30% rev approx= $690,000

Total business
Revenue approx $8,000,000 (inc only 50% of app rev)
Gross profit = approx $4,000,000 for FY 2019

Possible growth opportunities
Global expansion
- NZ
- EU
- ASIA
- USA
New Products
- Pet trackers
- Elderly
Domestic
- Increased market sales and share in growing watch segment
- Successful advertising campaign
- JB-HIFI rolls out to Good Guys
- School businesses continue to grow
- Increase telco uptake


My cons for the company is that they only have one major product atm and that there is the possibility of increased competition from the majors.
They have mentioned in previous presentations that they are looking at expanding products. This is obviously going to take time but if successful when new products come online they will be able to easily introduce into their already established Allmytribe app and sales distribution network which should save lots of costs due to scale.

I believe the cons are outweighed by the many positives as stated in the figures above and including; its best product in segment, founder-run company and majority shareholder, large increase in sale realistic (potentially 50,000+ pa in the next couple of years).

Anyway, this is my rough view on the company would loke to hear if iv missed anything GLTA