Ann: 2018 AGM Chairman's Statement & Corporate Presentation, page-6

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Pagman

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23/11/18

10:46

Post #: 36614707
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Originally posted by Antipodean: ↑

The capacity increase will help them increase the volume of output. Ouput of 5000 tonne/annum compared to 1500 tonne/annum is a 333% increase which is great. But there is more to the story.

You need the sales to match this growth in output so that the sales receipts increase will be proportional. This is not a guarantee, look at the dip in FY2017 from the IPO prospectus where sales went from $2.00m (FY2016) to $1.57m (FY2017) "due to changes to a customer supply arrangement..."

The profit increase will only follow if sales are accounted for as above, and costs are controlled. One example of an increase in cost is the resolution 6 and 7 from the notice of annual general meeting (announcement 22/10/2018). Renumeration for year ended 31/3/2018 was a total of $175,832, the proposed renumeration for year ended 31/3/2019 is $1,576,390. Almost 900% increase - so this is going to adversly affect the proportional increase in profit. I'm not inferring anything more from this than an increase of costs by the way - costs are expected to increase.

So I don't think $1,000,000 in profits is on the books anytime soon. That being said I'm researching this one so I don't have the full story yet. I would suggest looking into more than just capacity to project profit.

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$34m cap for this coy seems awfully high, considering the projected sales/profit from their capital raising. Maybe too much expectation from a market that is becoming saturated.

KTD Price at posting: 47.5¢ Sentiment: None Disclosure: Not Held
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Ann: 2018 AGM Chairman's Statement & Corporate Presentation, page-6

Top Stories

Breaking news: New opportunities for investors & companies - HotCopper opens to capital raising!

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up