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The share price has dropped back to where it was, I think primarily due to the continued high net debt position, somewhat higher than I anticipated. I did think these results might not be enough to sooth the market that funding will be required and it will take until the interims. Overall.. - The company still has sufficient working capital facilities - £0.9million of short term lines and £2.9million of invoice discounting facilities, added to £0.7million of cash. - Trade and receivables is £3.8milllion but the commentary says that receivables fell to £1.4million. The balance of £2.4million is accrued income. As I understand it, a significant portion of this should have converted to receivables and subsequently have been invoiced on deployment, giving a significant boost to working capital. - Overall cash costs to the business for the year were around £7million - around £600k was interest charges and the costs of share issuance. If the more stable revenue from the new contract can be realized and they can start to move away from using short term, more expensive debt and invoicing discounting there is considerable savings to be made there. This year is the critical year - the company needs to demonstrate its investments can generate cashflow and the balance sheet can improve. I believe it should do and the interim results should give a good indication of that.
The share price has dropped back to where it was, I think primarily due to the continued high net debt position, somewhat higher than I anticipated. I did think these results might not be enough to sooth the market that funding will be required and it will take until the interims. Overall.. - The company still has sufficient working capital facilities - £0.9million of short term lines and £2.9million of invoice discounting facilities, added to £0.7million of cash. - Trade and receivables is £3.8milllion but the commentary says that receivables fell to £1.4million. The balance of £2.4million is accrued income. As I understand it, a significant portion of this should have converted to receivables and subsequently have been invoiced on deployment, giving a significant boost to working capital. - Overall cash costs to the business for the year were around £7million - around £600k was interest charges and the costs of share issuance. If the more stable revenue from the new contract can be realized and they can start to move away from using short term, more expensive debt and invoicing discounting there is considerable savings to be made there. This year is the critical year - the company needs to demonstrate its investments can generate cashflow and the balance sheet can improve. I believe it should do and the interim results should give a good indication of that.
As you predicted spike now 6m revenue indicating a much stronger second half.
A nice run up to the results with the bid price now at 5p. I expect the results to be good and the commentary to be especially upbeat. - Revenues of around £6million, meaning revenue for the second half was £3.8million, boosted by the roll out of the OTT solution in February. - I'm not going to speculate on EBITDA and PBT as its difficult to know what happens with amortization, however the £3.8million revenue in second half should have been higher than the cash cost of running the business. - We know cash was approximately £600k. Overall net current assets should be around £600k with long term debt at around £1.5million. - Overall net debt is likely to still be quite high - £2.5-3million, but this should no start to unwind as receivables and accrued income start to convert into cash. Hopefully there will be some initial indications on response to the roll out, also I expect guidance that free cash flow should be generated in 2017. I think there is still a concern held by the market that more equity is needed and I hope this is somewhat allayed by these results, although it may need the interims from this year which should be very strong. Overall I'm optimistic - the early release of results, coupled with the accompanying analyst presentation and the fact they have a reminder about the results on Twitter suggests they are pretty confident, but who knows how the market will react. I agree with rocker that this is worth 12p, although I suspect it will need a full year of free cashflow before the market believes it. Of course another deal would also be very helpful.