My model is not as optimistic as yours as I don't believe the volume can increase without promotion and marketing at a greater rate of cost per unit than current but contrary to that there shouldn't be a doubling of wages expense however with bonuses etc a sucess in increased sales would seem to benefit management long before shareholders IMO. Also with each new area they introduce there often a initial socking special so margin is cut on new shops and expansion or rebating advertising / promotion done by distributors and also volume discount levels creating rebates all taking a small % of net sales number. Ie lower margin on start up but depends when these rebates are paid, Lots of travel and legals but most should be in previous quarters as lead times are long with planograms and new product introductions. So increased costs now mean possible future deals and more sales volume 3-6-9 months out.
With more regions and running different labels or boxes etc changing series you end up with inefficiency and also holding more stock to ensure continuity of business. Changes each take time in manufacture when you only have one line. That one line become a higher risk factor should they have further breakdowns or issues in regards to factory be that weather, electricity, etc.
Berty if you want to have some fun run the numbers for the initial stocking order for containers to Australia assuming one shift and using info from recording of investor update where it was discusses about production to replace low levels at warehouses. Have they had to do a few double shifts to ensure supply . Add to that production for introduction into Canada ( pop 35 mill).
YOW Price at posting:
38.5¢ Sentiment: None Disclosure: Held
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