What are the negatives?, page-7

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lukelee

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08/04/16

15:49

Post #: 17458229
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Originally posted by SA1588 ↑

Lulelee, big thankyou for your input. I have explored the cash flow risk and the following are my observations:

TFC transparently identifies its cash and non cash revenue; and its cash EBITDA (see page 9 of https://www.belldirect.com.au/file.type?src=lEih7mNYKULRcKtR51y9KL%2bsAVd5ff5E This suggests TFC believes it does not need to hide the cash generation part of its business.

TFC’s cash revenue has increased from $18.4 (1H FY13) to $60.7m (1H FY16). A compound growth rate of around 50%. Similarly cash EBITDA has increased from a loss of $11.1m (1H FY13) to a surplus of $8.6m (1H FY16). A clear trend of increasing cash EBITDA.

TFC states its “cash inflows from plantation sales are heavily weighted to H2” (page 15).

The CEO stated “The 2016 harvest will commence in May 2016 and is expected to deliver more than 300 tonnes of heartwood – a tenfold increase on last year. Our harvested yield will be sold to our diverse global customers and generate attractive cash margins which will transform our financial performance” (my emphasis)

Consequently, I am not concerned with the cash flow risk. I believe it is one of its great positives because it is about to commence receiving large cash inflows.
[Please note, I am not ‘debating’ with you. I am writing this post to force me to consider the risk and justify my conclusion]

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Thanks for all these information. I am thinking about signup the share purchase plan.
TFC Price at posting: $1.63 Sentiment: Buy Disclosure: Held
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What are the negatives?, page-7

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