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Fatman8

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11/01/18

15:44

Post #: 30231380
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Originally posted by Blommer ↑

Yes its still loss making in the US, which is what they told us, though from a positive angle.

Sales and market expense to ACV increase ratio is pretty much 1:1

ACV Revenues are covering capture costs - so a 1:1 ratio too

So at the moment, their sales team expenses convert to ongoing ACV subscriptions revenue at cost, which is pretty good.
It would only take one year to pay for the sales expense and then should produce ongoing income for many years after.
However, at the moment, this ongoing revenue is only paying for the capture costs, meaning that the sales team expenses must come straight off the balance sheet.
Then there are admin costs on top of that.

It looks as though they would need to roughly treble their $8.5mil ACV from here before the US operation is generating any meaningful free cash. Assuming they can maintain their impressive 1:1 sales to subscriptions ratio, this will cost $17million over at best 2 years. Then when you add in the 2 years admin costs the picture begins to emerge that they don't currently have the money or earnings power to get there without additional raisings.
After that it would be plain sailing for as long as the technology remains relevant.

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3D was rolled out in Nov 2017 The if we are breaking even on the fly overs & this is included, Money spent on sales & marketing running at 95% return in usa and 100% in Oz. The 3 new browsers. Pretty much unknown what revenue streams this will create.
Roll on 21st Feb hopefully we should be trading higher by then.

NEA Price at posting: 69.5¢ Sentiment: Buy Disclosure: Held
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Undeniable, page-14

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