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S2020 - it is a very positive trading update with an underlying "less is more" in the short term and current market conditions.
Fortunately we now know ( and Cenkos state) a placement is not necessary as we have a LOT more cash than guidance predicted.
Where’s the boat party invite. I’ve started researching some big cigars
Brock,
I appreciate that Cenkos aren't right with everything they say, especially as we have never hit their target yet as far as I'm aware, but they are pretty certain that based on the cash reserves and revenues coming in that a placing will not now be required. Have you read something different elsewhere, If so, can you enlighten me?
The de-rampers sharing their concerns about cash late last week were wrong, so just hold your hands up and say "I was wrong", the cash-burn in the 6 months to 30th June was A$18m better than the Cenkos forecast, or a small placing in your language. In the current macro environment that's great performance and shows the current management are running a tight ship and have control. They have confidence in the position so much so they issued the Trading Update 2 weeks early.
So today they try find a new problem and that problem seems to be having too much demand for our fleet product and having A$3.5m of guaranteed sales in FY23, such a problem to have.
I don't agree that Auto is "the big prize" it's 'a big prize' I believe Fleet will be bigger than auto.
Reasons to be happy, optimistic, delighted and all round cheerful about fleet
- A$3.5m of guaranteed sales in FY23
- Recurring revenue from monitoring A$20.7m+ as it increases every year, like magic
- New after manufacture product because of regulation
- Shell Oil, Coca-cola, it's like a game of name the 80's icon
- Gen 3 will launch in FY23
- No old stock to worry about, see its a positive
- BMDS is not dead its very much alive and kicking, could be shown as auto but it's the Fleet product
- 10bn KM of real-time data, gold
It's ok to be wrong, jeez I once 9or twice) said 100p by 2020, I was wrong...
I agree auto is the big prize, but it won't be so rewarding if we have to do another diluting placing.
Fleet is key as to wether that is needed or not.
Try and make a point without the finishing insult next time, you'll find you are taken more seriously.
Matml, have to agree.
Auto in 24 models on the road and 90%+ margin and numbers exploding.
Note, 'year' meaning CY in this instance.
I do find it amusing that some are worrying about a few thousand fleet installs when it’s auto that is the big prize. Jokers.
So, with the 2k they couldn't install yet and have carried over, that means, on sales, that they near matched the latter half of last year with the first half numbers of this year. Considering the latter half always outperforms the earlier half of the year, that's great news!
As long as they have another strong latter half of the year, which there is no indication they wouldn't, then we are growing very nicely indeed.
Just close your short and naff off will you? There's a good chap.
Brock
With supply issues let’s hope the current 6 months start to explode. Add on the 2000 units sold but not installed yet still gets us over 10,000 units for the 12 months. Yes the figures weren’t as good as I expected but they must be doing something right to have $59m cash, when Cenkos said $41m expected.
With auto 20% more on the road than Cenkos forecast & nearly 50% more cash than they expected I can’t grumble at this point.
Auto is starting to ramp up now. Nearly doubling the 250k on the road at 31st Dec. Let’s hope this 6 months we blow Cenkos expectations out the water again but more importantly with results out 2 weeks earlier I would expect some nice contracts to start dropping soon.
Actually Fleet is worse than it looks because of the 8100 increase they did 5216 in the first half.
So even with the Shell contract they only managed 2900 in last 6 months.
I'm amazed cash burn was not more. As Chutz says not holding inventory has helped a little.
My view after a review of the Trading Update and Cenkos note
Auto: - Out-perfoming
Cenkos had 370k cars on the road at June 30th, the company delivered 447k. That's high margin (90-95%) revenues delivered ahead of the plan.
Then we have the company comment on NRE "NRE revenue, 61%, year-on-year, as new programs begin, with additional, bespoke features, a strong lead indicator for future royalty revenue."
Fleet: - "growing demand"
Personally I am ok all the stock is sold, we are about to move to Gen3, I would be worried if we were holding a lot of stock. They are very clear in the extract below that the manufacturer has a solution, imo it's great to enter FY23 with guaranteed sales.
"This has resulted in all available stock being sold in FY2022 and over 2,000 Guardian units ordered and not yet supplied, representing around A$3.5m in forward orders to be recognised in FY2023. Supply chain issues have been resolved with the Company's manufacturer, resulting in their guarantee to deliver satisfactory levels of stock by the end of H1 2023 to meet the growing demand for Guardian hardware."
Cash - hugely out-performing
Outstanding cash performance, in a environment where interest rates are rising across the globe controlling the cash in vital, Cenkos had A$41.7m, I hoped for A$50m+, very surprised its almost A$60m.
In their note this morning Cenkos rule out the need for placing, imo if a strategic investor wants to pay above 11p Paul might consider it but the important thing in this environment is not having a "need".
Good to be sold out with the punter wanting more. Far better than sitting on stock nobody wants.
You have to accept some glitches in a growth story. The key thing is it is a growth story.
But it doesn't state when we Will have stock either.
Currently 2000 orders go unfulfilled.
This is what it says broken up into separate propositions:
1 Supply chain issues have been resolved with the Company's manufacturer,
2 resulting in their guarantee to deliver satisfactory levels of stock by the end of H1 2023 to meet the growing demand for Guardian hardware.
This states that the issue has been resolved and that by the end of Dec 31 SEE will have enough stock to supply a bigger size mkt - it does not state that they will have no stock until the end of Dec 31!!