ZNO's free cash flows is quite impressive. 2H 21 should see...

ZNO's free cash flows is quite impressive.

2H 21 should see a strong rebound, as businesses begin reopening on the back of vaccine rollouts, and as UK and the US come into Spring and Summer.

1H21 operating cash flows included tax payments for all of FY20, where no tax instalments were previously made. Hence free cashflows would have been even higher on a normalised basis.

As a rough guess, NZD 10m of free cashflow for FY21 wouldn't be unreasonable, given the business initiatives underway.

Against a MC backdrop of circa 110m, this is indicative of an oversold state shareholders find themselves in atm.

There is good reason to believe 2H21 will see a rebound in business and my thesis is that ZNO is a cash-cow. Continue to watch free cashflow (operating cashflow less investing cashflow) and take some comfort that the business is generating and continues to generate outsized cashflows.