Revisiting the last half results is a useful exercise. Please...

Revisiting the last half results is a useful exercise. Please anyone with a professional and constructive outlook take a look at my analysis.

Firstly, these results include NO revenue from any of the new contracts. But income was up, to $8.64m. Let us presume that this will remain the same.

Underlying, ongoing expenses (with D&A and fx gains stripped out), are $5.265m. These will undoubtedly rise, as more sales avenues are used and enquiries increase with greater market penetration and recognition. Let us say, again for argument sake, that expenses will rise to $6m for the half.

The four new contracts will only begin to start flowing late in this half.

For arguments sake let us extrapolate and use the corresponding half of next financial year, when they will all conceivably be generating revenue. I also calculate them as straight line revenue generation, as an assumption.

For a half year they will generate $2.81m.

(8.64 + 2.81) - 6 = 5.45m

However, this does not take into account new signings. Nor does it take in to account the transactional nature of the new contract model.

I myself work in an unrelated industry, but one which uses the same transactional model (Software as a Service - SaaS). The revenues generated are typically much greater than the nominal amounts contemplated in any given contract because the contract is for defining the value of any given transaction/use, not for defining the total value of the contract. With disruptive technology like PMEs, a new client will often lowball their defined needs as a risk management tool. But this means that any use of the technology over and above the minimums they have agreed to will not be part of the announced contract value. In other words, the revenue will be much greater.