I ask management some questions around half yr financials below are responses detailing my questions:
Q: I note that gross margin was 45% for the business (which was pleasing and has remained stable), however it appears that a lot of cost were being absorbed into corporate and business admin expenses in particular personal expenses. Would you be able to further detail what personal expenses are? Also would you expect this to remain at this level or continue to shrink going forward?
A: These are the fixed costs of the business eg rent wages etc. Given that there were costs associated with restructuring in 1st hy 2012, this should reduce in 2nd half and s/h shouldn’t expect to see it increase.
Q: I note on the balance sheet that there is a current interest bearing liability for $2.8m. Would you be able to provide more detail on the nature of this debt and its purpose eg is it a bank overdraft used to fund cash flow etc?
A: This is a debtor finance (invoice finance) facility used to fund working cash flow.
My assumption here would be that these funds of $2.8m would be accounted for in the current cash position. Note also that these are my summarized answers and are not word for word.
I had some other questions as well that I will post answers to later.
NMS Price at posting:
2.8¢ Sentiment: Hold Disclosure: Held
