The next chapter - FY21 and beyond

What a rollercoaster.

I'm now back at breakeven, thanks to purchases at 1.3c, 1.4c, 1.5c, 1.6c and 1.7c. I remain convinced that 5c is a strong possibility in the short term and that we have an exciting few months ahead of us.

The COO Tasso and the rest of the team have done a terrific job thus far in developing technology that is both functional, scalable, and now thoroughly validated by an OEM.

The current Board and Management team holds an under-promise, over-deliver objective and, as such, when we do finally get an update, I expect it to be significant. The AGM will likely provide an opportunity to update the market on both the product and the growth strategy.

The current valuation (1.8c for a $15M MC) is so low that it is implying that the market thinks revenue is set to indefinitely flatline, and this has been dedicated largely by emotional and panicked selling. This is the revenue assumption that is baked into the share price currently (< 2x FY20 revenue).

I'm willing to put my money where my mouth is to state that this company is a growth company (look at the trajectory over FY18-FY20) and it will eventually become valued as such.

The market has a way of rewarding those who wait as it transfers wealth from the impatient to the patient. A $30M (3.6c) to $60M (7.2c) market cap is more than feasible within the next 6 months, which would be a range of 3.5x to 7x FY20 revenue.

A return to 3.6c from here would be a 100% rise. That is the beauty of the share market; if a stock falls 50%, it constitutes a 100% rise to get back to that starting point. In the bull case, a climb to 7.2c would be a 300% return from here.

"Regarding the business more generally, as we did in FY20, we are so far continuing to win customisation work from GM on a regular basis. This benefits us in three ways: work fee, higher ARR and improved customer stickiness. Whilst the relationship with GM is excellent and growing each day, we are also absolutely committed to diversifying our revenue streams"

"There are early discussions with other OEMs, and some of these will now be supported by some of their own dealers that are already using OnTRAC to sell GM vehicles (these are multi-brand franchise dealerships). There are certainly no guarantees (and the automotive sector is not known to move quickly), but we feel that the two-pronged approach supported by our visible success with GM should put us in good stead over time"

I'm looking forward to the next few chapters of the CXZ story unfolding in front of our eyes.

T.E.P.