Agree - Next quarter without one-off's, will be close to B/E. CHL is starting to benefit from the flywheel effect on it's cashflow and you can really see evidence of this in the last quarter.
We saw a bit of it in Q2 2021 (Oct-Dec 21), post lockdown and before Omicron in Australia but now other geographies are starting to fire up at the same time. Even NZ, this time of year is meant to be quiet.
When I look at the Jul-Sep quarter in 2021 - back when NSW, VIC was in lockdown, borders shut, NZ was closed (and pre NZ acquisition), OCF burn was $2.3m. But based on receipts of only $7.6m for that period (compared to the recent $15.8st quarter)
Normalise it for Jul-Sep 2022 assume receipts in that $15-$17m vicinity, increase wages to $2.3m, keep marketing expenses elevated up around $1.3m and assume other admin expenses remain around $500k and you're tipping into Break-even territory straight away.
I noted on Claude Walkers 'A Rich Life' that he's mentioned that CHL may need to raise new funds in 12 months time. I'm struggling to get the same time frame as this.
I can see 2 to 2.5 years and could be longer as the next 2-3 quarters show some true colours.
And yet even if they do, I think the IPO demonstrated how little this business needs to raise to sustain it's operations for years (even assuming lockdowns, border closures, floods and bushfires all happened again).
CHL Price at posting:
$2.25 Sentiment: Buy Disclosure: Held
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