ill spell it out my product sales (hypothetical BUT same) Rev:...

ill spell it out

my product sales (hypothetical BUT same)
Rev: $100
Cost of sales: $60
Dist costs: $30

NET: $10

BUT
ADMIN (fat cats etc) cost: $20

Loss of $10m
so, for every $100 item sold, they CUT A LOSS. BUSINESS is NOT profitable (failed model)

Next - CASH.....to stop the above bleed...

Sell the only asset of some worth:
June Cash was $21m, sold asset adds ~$10M ($6M deffered for 1 year - spread salvage fund to ensure exec salary $$$ as they milk YOUR funds)
$21M + $10 part sale = $31M

NOW the real hit, we MADE $2M in free cashflow through sales.....like really?? lol YOU SELL AT A LOSS - LOOK AT P&L ABOVE...

MNGT SOLN (thats why u pay them the big $$$) is to defer cash payment on supplies....your inventory has DROPPED by $10M since 30 June (6mths) BUT Trade and other payables has INCREASED by $300k and remains at $37M...hmmmmm

dont care if inventory is under 90days - thats srf stock, what about their aged DEBTORS??? bet its growing...managing cashflow to fund a business in LOSS...

look @ cashflow statement, notice the drop to cash paid to suppliers & employees....hmmm...payment deferred?

model fail. doesnt and can-not turn a profit. Sales revenue barely covers COGS & Distrib costs let alone the fat cat admin...cash WILL dwindle - thats why they phased the sale proceeds, to "buy time"

what i wanted to see - the p&l fixed, so a decent NET margin after COGS & distrib costs. As the sales mix (post divestment) should result (if mngt are doing their job) in improved metrics - IT hasnt...

scary. they are buying another 6-12 mths to turn this around, a further ~$6m cash injection will omnly last a half year to Dec17 - hope for all longs they pull a rabbit out of a hat and make the business via P&L more profitable.....not convinced they will....

DYOR