Ann: Trading and Sales Update, page-131

@chuk - in some respects it is even simpler than that. And no one should have expected sales of 20,000 units. You didn't need to be watching JB Stock levels (as rough as they were) to understand it... you just need to read the company announcements and be able to do some very simple maths and make some reasonable calculations and assumptions.

On 5 November, MWR stated they had sold 8,300 units. On 22 November, MWR put out an investor presentation that said that by March 2019 they expected that they would have sold a total of 20,000 units. IE they forecast (and told EVERYONE) that they expected to sell 11,700 units between 5 November and 31 March (so a period of 7 weeks up to 31 December, and then 13 weeks after that). Given the timeframe and sale periods, it is probably reasonable that this would be split 4,000-5,000 through to 31 Dec, and then 6,000-7,000 for the next 3 months (perhaps even a little more post 31 Dec due to the main advertising campaign occurring after 31 December. (Remember when it launched they said for a full 12 month period they estimated sales of 3,000 units, with the chance of 5,000 units, and an extreme case of 10,000 units). So 4k-5k in 7 weeks is pretty damn good.

This week, they tell us that there were 15,100 sold from launch until 9 January, with 2,300 sold in January, so that means the total sales up to 31 December were 12,800. This means between 5 Nov and 31 Dec they sold 4,500. So this is in the reasonable range if you exclude the 2,300 ordered between 2-9 Jan. But it would seem that the 6-7K for Jan-Mar is likely to be exceeded. This is supported by the fact that the CEO tells the AFR that they expect to be out of stock by mid-Feb (and that they have already planned another manufacturing run in February). This means that by February they expect that they will have sold a total of 28,800 units (being the 23,800 that had been ordered, plus the extra 5,000 they ordered as announced at the AGM).

SO... if they have sold 23,800 unit by mid-Feb (let's call it end of Feb, that means they will have sold 16,000 in the period from 1 January to end of Feb (or 20,500 units between 5 November and end of March). Substantially exceeding the company's forecast towards the end of November.

Now, tell me... how that is bad, or below what people should have been expecting?

And then to top off with even better news, the company tells us that they will be launched in both UK and other European markets this year. (Note they said European markets). They confirm that they will launch in these markets this financial year. This is not one country, but at least 2). I suppose no one believes it until they are actually launched.

There is no way that the current share price is reflective of the sales for Australia, the Australia school message business (which had its best revenue quarter EVER in the September Quarter), the NZ market, plus 2-3 other markets (including the UK plus European ones).

To think this sold off from $3.90 to $3.45 (with a low of $3.21) is crazy.

Anyone who has followed this for years (as I have) knows that Mark always under-promises and over delivers. He always has. He always will. And he has done so again here. Well done to anyone who has bought on this sell-off. I'm just annoyed that I don't have sufficient spare cash to buy a meaningful additional batch of shares.

Anyway, people need to do their own research. I know I have, and I absolutely LOVE what I see.

Cheers

Marv