It seems like the company has turned its fortunes around. At the AGM the MD said: "You can see from this progress that we are in a far better position than our financial year 2012 accounts indicated and we trust that shareholders who have stuck with us during these difficult times will remain with us as performance turns around."
However, at the end of FY 2012, the company's cost of sales was about $3million more than its revenue. The net loss was about $40 million.
In FY 2011 net profit was <$2 million. Now, the interest expense in 2012, was $800,000 more than in 2011.
Interest bearing loans and borrowings increased by $15million in FY2012. The recent sale of the solar array in Italy reduces borrowings by over $10 million. So, in approximate terms, CBD might reduce interest payments by $500,000 - $600,000. However, they will have also reduced revenue by a certain amount (one hopes, less than the interest they will save).
In conclusion, CBD have their work cut out to turn a profit in FY2013. However, this is a highly volatile industry, and if they have a very good year, and manage to pay down debt from free cashflow, rather than from sale of assets, then suddenly CBD will look like a very different proposition.
CBD Price at posting:
2.8¢ Sentiment: None Disclosure: Not Held
