News: STL Stargroup posts FY NPAT of $1.9 million, page-12

Just sold and will wait it out for better results, wasn't a massive fan of the results. Here's my view on the results, backing out the accounting tricks. (I.e. the company can sell NeoLCp if it wants. But it won't. Why didn't it sell the shares to fund Indue? That revaluation profit is purely an accounting trick). I don't include depreciation either as its non-cash expense; although its good for p/l accounting. Depn in our case doesn't really make a difference from a cash flow perspective as the ATMs see very little wear and damage, I believe.

It appears that the company just wanted to make a profit, which is fine but I'd rather it make a loss and save the tax asset for when we get dividends.

Gross profit = 2 million
Other income = 300k
Total profit = 2.3 million.

Admin expenses = 4 million
Net financing expense = 500k
Total costs = 4.5 million

Total cash loss = 2.2 million

*$6 million remaining as a tax asset.
*EBITDA was expected to be negligible as per the 13 June investor preso
* $9 mil in borrowings against a market cap of $15 million @2.2 cents. $1.6 mil in cash. Debt seems to have jumped with accumulated interest to boost profits?
* EFTPOS delayed until November, which is unfortunate.
* Cost of sales against revenue doesn't leave for a large margin. Cost of service has risen tremendously. I'd be interested to hear more details around this expense from Todd. Can it fall in the future, if revenue continues to rise or will it continue to rise with revenue.
* Revenue $8 million for the year, on target. Revenue target of $20 mil for FY18. But how will expenses go with that result?

I am very interested to see how the market reacts in the weeks ahead. STL still a good story and I like it. But a few too many disappointments from this announcement, I'd say. Happy to sit on the sidelines for now and hopefully buy lower.

GLTA.