The EGP Capital report on LPE, linked in another thread,...

The EGP Capital report on LPE, linked in another thread, suggested the cashflow statements were not a good indicator as to whether the predicted yearly sales figure would be achieved. It gave several reasons for this which have previously been discussed on this forum (eg monthly/3 monthly billing, winter vs summer demand etc). What they said makes sense and I just assumed was correct.

Interestingly if you add up the 4 cashflow 4C sales figures for FY18 they equal the $20m reported in the annual accounts, the same for FY17.

 FY18 $4m + $4.7m + $5.7m + $6.6m = $21m they reported $20.2m in the annual accounts

 FY17 $1.1m + $2.1m + $3.3m + $3.7m = $10.2m  they reported $10.2m

Now LPE amended it's forecast for sales from $44m to $32m. 

I think the $32m will be met or exceeded for the following reasons:

 - We are 1 month into 3Q, they'd know what has been billed or is about to be billed for this Q, 

    that only leaves 4Q as an unknown. Not too hard to predict a minimum, or band

-  Another sales down grade would be suicide, 

   they would have been very careful to ensure $32m was achievable & conservative

- They embarrassingly had to amend the NPAT figure.

    they would have closely looked at other figures eg Sales to prevent a 2nd amendment

Assuming management isn't completely stupid and the $32m will be met or surpassed, the next 2 Quarters will need to total $18.9m which would be a vast improvement on the 1st 2 quarters.

Growing sales year on year from $10m to $20m to $32m is a very good result. If they came out and forecast the $32m in the 1st place and gave some explanation as to how they predict that figure, our share price would be 50% higher than it is today. The market hates downgrades.