Good to see return to profit and happy for shareholders but way to early to say strategy is proving to be correct. Look where the segment analysis and see where the profit's coming from: Australia/NZ NPAT $1,257k!! North America NPAT ($921k).
And a very modest 2.3% increase in Gross Profit to 47.8% after a full year of hardware manufacture solely in the US. Taking into account the increase in software sales Cost of Goods Sold % of hardware may in fact have increased. There is however not enough detail to work this out but manufacturing cost in the US was supposed to be so much less than in Perth so I would have though there should have been a much greater improvement in GP. (Wasn't US labour + oncost supposed to be half that in Perth Medtech?) BTW I looked back to 2013 & 2014 when manufacturing was solely in Perth GP was 57.5% & 52.5% respectively.
Also, don't just take all figures at face value. For example, Overhead Expenses said to reduce by 22.5% from $8.26mil to $6.4mil??? But as per their report for 31 Dec 2016, the $8.26mil included a final $890k "one-off expenses relating to the restructure". Excluding these one-off expenses reduction in overhead expenses was less at 13%
At least things are moving in the right direction so good luck to holders.
AZV Price at posting:
7.9¢ Sentiment: None Disclosure: Not Held
