Quarterly growth is wonderful... but it hardly pays or matches the ongoing staffing costs of this enterprise. Cashflow statement tells it all. If not for the R&D grant received from the govt ($984k) you'd be looking down another capital raise (after the one just completed).
The company has realised, whilst revenue growth is wonderful, they need to extract margin from this business... hence the company's direct channel drive. Key will be the margin improvement - you'll see this at the cashflow line. They have talked for years that the company is becoming cashflow positive (at the operating level). We shall see.
Unfortunately the inevitable dilution is just around the corner.
To be honest, the company revenues need to be substantially bigger (and margins substantially improved) to support a material uptick in the share price. It will never get there at this rate. All we do is support management salaries... and an increasing cost base as it goes direct to customer - it needs a sales team to support this movement. Watch the staff costs increase at rates in excess of revenue growth! Cashflows will tell the story once again....
The only way forward is to acquire or be acquired. An acquisition will require money that they don't have - s/holders will be once again diluted; any raising will go to s/term investors that will trade the arbitrage having not interest in the long term. OR they could be acquired, but who would want to buy them on such pathetic revenue numbers.
I have no idea forward for this company or for management to add any material shareholder value.
MNW Price at posting:
2.0¢ Sentiment: Sell Disclosure: Held
