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Billy, one more point can I ask?
What is included in Cost of Sales?
My guessing is the raw materials, cost of production, selling etc. Revenue obviously money from selling the products. So from your calculations you stated, the margins you calculated (ie minus margins) would only be correct if the number of products sold matched the number of products produced during that period. But this would not be the case in any business and as such, any unsold products and any raw materials from that period would be added to the inventory (and would be sold in the next period). The value of Inventories has gone up by £70,000 during that period (finished goods down £10,000 and raw materials up £80,000). Which surely means that the cost of these raw materials should be calculated into the margin you so proudly stated as a minus figure. But how does that affect the margin? What if the cost of product is 90% raw materials? Surely the then only another 10% of costs gives them another chunk of products to sell with only 10% of the costs??
To make it simpler. I declare a margin of 50% as I make products for 50p but sell for £1. In a financial reporting period I make 1000 products each but only sell 500. Cost of sales £500, Revenue £500 so my margin in Zero according to you. But I've still got 500 products to sell so is my margin now 100% for the next period?? Or is it still 50% as I stated. Definitely no Zero though!
I refer you to the comments I just made, you are quoting out of date figures you are assuming from an irrelevant period pre the main roll out. You know you are quoting old irrelevant figures selecting short time periods and are obviously doing this for mischievous reason.
Vascular has been quiet today ! Can’t see any of his posts …..
Reversing at 70mph ….
I have already stated that we will not know the gross margin for the current period from 1st April to to 30th September until we receive the interim accounts for this period. This period will (i expect) include a much higher proportion of store sales as compared to online sales. As such, the impact of online discounts should be much reduced and (I expect) a return to a profit margin (hence the trading profitably statement in the earlier RNS).
It will be good if we get a breakdown of online (UK/US) v store sales (US) as regards revenue and margins but not sure if we will get this as this early stage.
The 30% stated in the RNS of 28th Jan is in relation to the gross margin in the interim accounts for period to 30th Sept and NOT in relation to business to business distribution deals. Don’t know where you get that from?
Obviously any discounts given to customers/investors will reduce the gross revenue received and thus reduce the corresponding profit margin (against the corresponding cost of sales figure).
Obviously a growing Company trying to establish market share will obviously need to do discounts etc but this will consequently reduce gross revenues (compared to if sold at full price). So I do not have a problem with the discounts themselves, they are there to establish market share in the short term. Over time, discounts available will no doubt reduce.
Obviously some businesses rely upon discounts within their business model. Dominoes typically rely upon deals/discounts to “justify” charging nearly £20 for a pizza. Obviously nothing to do with CHLL but that model seems to work for them!
The accounts for period to 30th Sept will show where we are at (gross revenue and profit margin wise) for the current six month trading period.Obviously more store sales will make the online Zoetic discounts and any online Chill discounts largely insignificant (hopefully).
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse. This could lead to an unlimited fine and up to seven years in prison
prison is far too good for trolls.....and the misery they cause....
Wow .. can they cancel his account on here ? Or will he go to prison !
does that constitute false or misleading ??....................................
Yes Billy, your comments are based on sales up to 31st March 2021 ie BEFORE the roll out really gathered any momentum. Don’t try and make them sound up to date by quoting 31st August. You are deliberately trying to make it sound like the margin is 0% when you know damn well it’s not.
Billy are you trying to imply the 20% - 30% retail pricing deals offered to retail customers directly from our own websites impacts the ~30% GP being referenced to in the RNS’s with regards to business to business distribution deals….?
My comment is based up on information released to the market via RNS on 31st August relating to the most recent accounts available. The point is that this information seems to contrast with the RNS statement on 28th January regarding 50% and especially the comment earlier of "well north of 50%".
Also you mentioned about the promotion discounts nibbling away at the margins. Do you not think that any company would have included those in their costings of how much margin they are going to make? So do you know that offering a 25% discount is reducing their stated margin for a fact?
So Billy, your 0% comment is based on figures from basically BEFORE the roll out really got started? And based on a very small time period from the last year BEFORE the roll out got started?? So how relevant is that right now?
And you wonder why people call you a troll!!
... the company had already made clear that margins had temporarily fallen to 30% for reasons described here earlier, but clearly guided that they would be back to 50% in short order...
As per my post to Matt,
........"the temporary fall to 30%" ....... has now fallen further to completely wipe out that first six months 30% profit margin.
....."in short order"...... was obviously not that short order as the immediate following six months saw a "loss margin" rather than profit margin.
.....back to 50% in short order (ie., certainly by now being a very reasonable assumption).... Surely, you are not assuming/expecting a 50% profit margin for the current six months period 1st April to 30th September ????
We will have to await the interims for the answer but I am certainly not assuming such a profit margin. Time will tell.
Taking my previous post a step further.
A lot of people may be of the opinion that the more we sell then the more profitable we will become (economies of scale etc). This should obviously be true but only when we reach the relevant "tipping point". As the figures in my post show, we have not reached that point yet. Quite clearly, the second six months produced more revenue but in addition more costs of sales so less profit (actually a six month loss which wiped out the first six month profit). As I say, there will be a tipping point where losses become profit but we do not know when that will be. As we try and build the brand by offering new customer discounts (currently 20%) and investor discounts (30%) it pushes that tipping point out further. I have seen lots of investors on here commenting on taking advantage of the 30% discounts etc but this obviously nibbles away at any profit margin. In fairness, once the US store sales rise significantly then the online discounts (mainly Zoetic brand) will not really have that much of an impact. However, we do not currently know what (if any) discounts are being given to Chill in the US to try and gain market share. I seem to remember (have not checked this) that you were offered 50% online.
So lots to consider. But it is certainly a case of thinking there is a profit margin of "well north of 50%". Certainly not in the short term. 50% in the medium to long term, hopefully so.
I am looking forward to the October Q3 update as there should be lots of info to digest. It would be really good if the update actually breaks down Zoetic and Chill sales separately. Even better, if they are further broken down to store sales and online separately. When you look at a Fevertree RNS, for example, they break down On-Trade and Off-Trade (as well as now UK,US, ROW).
seriously? I mean, seriously?!? You're going to hound me for my 'in excess' clause when you 2 are unwilling to concede you missed/ignored the fact that the company had already made clear that margins had temporarily fallen to 30% for reasons described here earlier, but clearly guided that they would be back to 50% in short order (ie., certainly by now being a very reasonable assumption) while one of you is still citing the meaningless levels from the 2020/21 interims??? crikey
Freddy Boy "Lots of upbeat news over on TG....any guessing as to why the trolls got themselves hoofed outa there ....."
Hmm let me think, could it be because the rampers bubble don't like to hear the truth, maybe all the clever one's chucked out can form their own Telegram group (rampers not welcome) so potential new investors can hear both sides of the argument.
From the Results to 31st March 2021 RNS dated 31st Aug 2021.
Cost of sales £361,517
Gross loss £40,642
Hence, Profit margin 0%. Loss margin (is there such a thing ?) 12.67%.
The Interim Results RNS for period to 30th Sept 2020 dated 28th Jan 2021 stated;
Cost of Sales £37,976
Gross profit £16,578.
Hence, profit margin 30.39% (which is the 30% figure stated within the comments section of that RNS).
By deduction, the six month period from 1st October to 31st March saw revenue of £266,316 and cost of sales of £323,541. So a six month loss of £57,225. Profit margin 0%. Loss margin 21.49%.
To clarify, I understand that these are historic figures to 31st March 2021. I also understand that stated revenue since 1st April to date is approx $2m (some feel that there is more revenue not yet disclosed during this period). However, in my opinion, I feel it is very difficult to suggest profit margins "have been maintained" at "well north of 50%".
Have you ever seen the film Groundhog Day ?
Billy, where is it stated or how do you come to the conclusion that margins are now 0%?
Fred, can't believe you've trademarked The Crew!
With all the green on here I have unfiltered to read and will keep unfiltered and try to engage once the obvious deramping ends but guys can you try and be at least a bit objective -
Billy, you pointed out about the 30% margins in your post at 9.18 but then have to add an irrelevant point about 6 months to March showed zero margin (in fact a trading loss) - Everyone knows that the previous years trading have no bearing on the future of this company but you can't help adding it to deramp! No other explanation. And to compound matters you mention it again by saying you are ignoring the lack of margin. Stating it isn't ignoring it! Again a classic deramp! These are why only a few people actually engage with you on here. Query the future not the past. The profits aren't going to be made in March 2021, but some in March 2022, more in 2023 and so on.
Vascular - you've rightly pointed out that another share has been smashed despite a decent rns and it's the way of the market at the moment. A share that you have invested "big" in. And good luck to you on that, it is very disheartening seeing a strong rns followed by an sp drop. Yet in the last 30 days 12 positive commments on OO, 10 positive comments on SEE BUT 100 negative comments on here, a share where you have very little invested according to your comments. 100 very long deramping comments, bringing up old data, looking at the now or the past when again surely it's the future when the money could be made here. Once the store count is in the 5000 to 10,000 range. once the UK's FSA finally get their act together and we can see Zoetic creams on store shelves. Pre March 2021 is not important.
Like I said try and be objective, same goes to everyone and hopefully this BB will become a place of info and analysis not ramping and especially reramping.
Just for clarity.
You did not state "my 50% margin assumption".
You actually stated " 'margins have been maintained' at levels we reckon are well north of 50%)"
Bearing in mind that since the 50% statement in the RNS dated 28th January, margins have apparently subsequently reduced to 0% (as per the results RNS dated 31st August), I would personally be happy to see margins firstly restored to 30%. If economies of scale eventually lead to a 50% margin in the medium term, then that would be great for shareholders. However, this will (in my opinion) be difficult to achieve whilst still needed to give 30% discounts etc (as is currently the case) while trying to build the brand in the short term.
I am still struggling to see stated margins "well north of 50%" as you originally stated....
Blue you said . "Chill meanwhile has stated recently that even at current store growth, 'margins have been maintained' at levels we reckon are well north of 50%).". Stated where? Where did they say well north of 50% ?