Hi Coppersnake, I think you answered your question yourself....

Hi Coppersnake,

I think you answered your question yourself. This new capital was raised for something, presumably to increase revenue by expanding. It wasn't raised to increase cash on the balance sheet and earn next to no interest. Looking at the some of the acquisitions they have made so far it's hard to see any return on the money but that is a whole other set of issues worth discussing on a separate thread. My point is that presumably having all this additional capital will allow them to grow revenues and if that is true, then it doesn't make much sense to make a adjustment to the expenses but not make a similar adjustment on the revenues.

The problem comes back to the amount of money raised and therefore the valuation. It is astronomically high and all it does is create a higher hurdle for them to get over. This is a classic mistake for early stage ventures when raising money. It is the sort of move that can ruin a company because it will never be able to meet expectations or it will take far longer than investors are willing to wait.

With regard to your concern about the ability to increase licence numbers. This is another bad result for them. On the first page of the directors report there is the following line

" Licence numbers for the Group grew 12.8% from 4.7 million to 5.3 million (30 June 2014: 20.5% from 3.9 million to 4.7 million)."

The growth rate in licence numbers fell from 20.5% to 12.8% over the last fin year. Growth is growth but the fact that it has slowed so dramatically in only the first full year of listing says a lot. With the valuation where it is, wouldn't you want the growth rate in licence numbers to be going up or at least remaining constant? If there is such a big market across ANZ, EMEA and the Americas (this effectively covers the whole world) why did they only increase sales by 600K licences?