Originally posted by Capraise
Product services revenue is skewed to the second half, so we should expect a better result in the next couple quarter. I'm looking for 1.5m Cashflow positive now.
One needs to look at 2020, with product sales contributing gross profit of about 8m a year now. Surely that's not the profit cnw expect if services gross profit covers cost in 2020. That would be a huge achievement. Am I reading this wrong?
I'm not sure as it's hard to follow.
Adding up the 3 divisions, they are making ~7.5million gross profit, which means their overheads and other costs, are sitting around 7million currently.
I am guessing the product division eats a lot of that, with warehousing and other costs likely put into the over-head bin, while in my view should actually be put into the COGS bin, which would show (I think as you've suggested before) that the product business is barely floating, or perhaps even sinking.
Last year they had 8.5million total gross margin, and made an underlying profit of around 800k which means overhead costs were around ~7.7million for the year. So overheads costs have nearly double this half, which I'm not sure about, unless there are some things which should actually be considered COGS.
Either way, the momentum this company has is great and their meeting their goals consistently. Just sometimes a bit frustrating to read their reports how they've broken things down.
