Gillysrooms, I would be grateful if you would share your reasons for your loss estimate. I am certainly not saying you are wrong, but my conclusions are different.
As an investor, but not an accountant, I always try to form my own view about profit and cash flow ahead of the annual announcements, as it is too late to profit after the results are published.
My thinking is as follows. I expect that all non-current deferred tax liabilities of $5.6M will be offset against a non-current deferred tax asset of $2.1M and a currently unrecognised deferred tax asset of $10.9M. This unrecognised asset becomes recognised when it becomes probable that future taxable profit will be allow the deferred tax asset to be recovered. We should not have to wait very long for this to occur, perhaps in stages. NEA only has a current tax liability of $0.3M, which is negligible. It paid only $22,000 in cash for tax in FY17.
For these reasons I take more note of EBIT and operating cash flow at this stage of NEA's profitability. Overall EBIT in FY17 was only -$1.5M. In FY18, I estimate that there will be additional revenue of around $14M, offset by additional expenses of $6M and additional D&A of $3M. So, the improvement in EBIT should be around $5M, taking it to around +$3.5M. There is no interest payable, and as explained above, I prefer to not let the (non cash and reversible) tax effect on profit cloud the issue at this stage. This is enough for me to conclude that NEA is already profitable at the more meaningful EBIT level.
I also like to look at net cash from operating activities. In FY17, OCF was +$3.67M. Based on the above changes to revenue and expenses (and no D and A showing up in cash flow), the improvement to cash flow should be around $8M taking OCF to over +$10M.
The above is all my non-expert view, and I would appreciate comments from others, particularly those with accounting expertise.
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