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I do enjoy reading Lemming investors but Elrico's analysis below seems wrong.
For H2 recently reported rev was £800k and the cashflow statement showed £514k unpaid invoices. This is standard as a lot of companies have say 90 days payment terms.
HOWEVER revenue and cashflow are not the same - the £514k is already included in the £800k figure so it would appear Elrico is double counting. So the £1.3m figure quoted is not accurate.
Do others agree?
In a trading update in January, he said he expected to meet his £1.2m - £1.3m sales, we should have confirmation of this in April when the FY results are provided to the market. What we are expecting confirmation of c£1.3m sales, confirmation a large proportion of the "debtor" figure of £514k has been paid as per invoice terms - this figure is simply invoiced sales yet to be received as cash in the bank. I know c50% of this sum had been paid by January, so it is likely more if not all would have been paid, giving OptiBiotix a small net cash position, slightly profitable.
I labour the above to demonstrate the infamous hockey stick analogy at FY, not period to period as a lot of investors expected, hence the selloff when H1 2019 figure of £148k sales. £808k H2 plus £514k assumed paid invoices from H2 give us a revenue of £1.3m for FY 2019.
Sales for 3 months of 2020 are c2.5 times the H1 £148K. It is worth noting December is a very quiet period in terms of sales, making the figure even more impressive, more so given the 2.5 times, H1 does not include sales from any of the three product launches in January.
If I assume 3 times £148k for H1 2020, = c£444k with 3 months to be accounted for, then H2 becomes very interesting because we know historically sales/invoices paid are H2 heavy. The bulk of these will be made up from H&B, Alphasigma and Seed health, the latter generating sales of $1m plus PER MONTH - what OptiBiotix's share of royalties is, is anyone's guess. Then we have a raft of smaller sales generated from Galenicum, HLH, Pharmabiota, Kappa, John Morely, CII, 39ytu Capsa Food, Agropur, Cambridge, Sacco, Velinoff, Nutrilinea, etc, etc. Some of these will be entering their first full year, thus still establishing revenue avenues, so don't expect too much from the individual partners.
Shandy. You could always PM somebody for their clarification. Maybe one of you is wrong ?
Not this again!!
Is SOH wrong shadypants??
I think he's in a better position than you.
SOH has confirmed this.... Elrico analysis is correct.
It is difficult enough out there without dragging this up everytime we try and claw back some lost ground.
ham cutlet. You said exactly what I felt like saying. Trying to regain some ground and then you get somebody chucking that out. Is that an attempt to drop peoples confidence ? Not the first time that’s been posted either. Some people are beyond belief.
not at all - merely trying to establish an accounting principle.
Revenue can only be claimed once. If an invoice is issued in a time period the date it is paid is irrelevant.
The date it is paid effects the cashflow statement not the P/L.
Why would i undermine the confidence of a share i'm invested in.
Not every post has to be ultra positive.
The H2 numbers were poorly presented - included SBTX share sell income in revenue figures which confused. I'm guessing SOH isn't an accountant
Shandy. I thought you’ve raised this question before and it was answered for you in depth.
Right James this is my last stab - don't bother answering. I did raise this a couple of months ago and was proved correct. Since then both Elrico and SOH have repeated this mistake, hence my recent post.
Below is a summary of invoices and accounts receivable (money owed).
Accounts receivable are "transactions your business has made for which payment is still due". So invoiced in period but not yet paid. By adding it onto revenue you are double counting. FACT
Sales Invoices and Ledgers
A sales invoice represents revenue that your company has earned. Using the accrual method of accounting, which treats a sale as income even before you have actually been paid for it, a sales invoice is an item to be entered in the revenue section of your ledger. Your total business earnings is a figure that includes the total amount of all of your sales invoices for a given period, as well as any additional income that your company has earned, such as from sale or rental of business property.
Sales Invoices and Accounts Receivable
Your financial accounting should also include a system for keeping track of which sales invoices have been paid by your clients, and which transactions represent revenue that still needs to be collected. Accounts receivable is the accounting term that describes sales or transactions that your business has made for which payment is still due. Keeping track of accounts receivable enables you to efficiently bill delinquent customers, and also provides information about whether cash flow shortfalls stem from low sales volume or customers who are slow to pay.
Shandy. Are you trying to say that the information that SOH and elric have discussed is factually incorrect or are you confusing the situation from your end ?
If so I think it’s a case that you need to contact Opti head office to clarify. As I am not the accountant for the business I could not clearly tell you how they run their accounts .
I thought the same when I read it as well shadypants2 and I enjoy reading elrico’s blog too. You can’t count it as revenues twice once an invoice is paid.
But if you strip out the sbtx sales and include the exclusivity and milestone payments revenues will be around 1.2 million or slightly lower, and once those invoices are paid cash on hand looks good. The only thing I want confirmed on the year end accounts is that all outstanding invoices were paid and no companies are in arrears.
It’s ancient history anyway, the only question this year is how profitable they can be. Elrico is right I think when he says SOH only forecasts revenues on the deals at hand, that UAE deal should bump up forecasts again, as should the new product range when it comes online, and there’s going to be a few wildcards!
Think a lot of the repeated errors are the fact that optis business years ends end Nov not Dec, however lots of payments come within that time as most companies wait as long as possible to pay their dues to everyone they owe. So year end is calendar year not company year, small bit very significant difference.
Btm line is, company is going extremely well and as can be seen with the latest RNS forging ahead with some excellent partners.
Shandypants2
I suggest you get back to your Lego.
Accounts receivable are part of revenue as in credit revenue, debit accounts receivable. When the cash is received its debit cash, credit accounts receivable. No double counting involved. FACT
If you don’t understand a receivable is already included in the revenue number you shouldn’t be invested in anything more complicated than a premium bond.
Shandypants is 100% correct you can’t add the receivable to revenue as it’s already in the revenue.
There seems to be a lot of disagreement over this.
"There seems to be a lot of disagreement over this."
There shouldn't be - you can't have a balance sheet position without a matching P&L booking.
If I start a company and at the end of the first year there is a receivable of £500k, there has to have been revenue of £500k to create that receivable - it cannot just materialise.
From the RNS today....selling well.
"We are very pleased to strengthen our partnership with Extensor to distribute our GoFigure® range beyond the Polish borders as they have proven to be a very reliable commercial partner and have recently placed additional orders for GoFigure® branded products to replenish their stocks.
The real facts,
We are witnessing transfer of wealth, wonder who benefits, certainly not JOE....
Hi Spike.
Firstly you can have no p and l impact from a balance sheet posting, as an example the purchase of fixed assets.
Receivables are not just from revenue, as examples this might be proceeds of legal action, sale of a subsidiary etc
"Firstly you can have no p and l impact from a balance sheet posting, as an example the purchase of fixed assets."
Yes, fair this an asset to asset movement, which is not an asset to asset movement
"Receivables are not just from revenue, as examples this might be proceeds of legal action, sale of a subsidiary etc"
Fair again, but again it also does not apply here. The debtors are from sale of goods / license agreements
Shandy, I have always made clear I am no accountant, so when I do comments as I have you can be assured I have checked. SOH confirmed the text explanation at the time. Why drag it up now!
Here's how TW came to a similar figure to me;
Cash which at the period end was £687,000, add back in trade receivables, knock off creditors, add in VAT and R&D tax credit reclaims and you get to a current asset number of £1.394 million (up on H1) and net current assets of c£1.1 million.
Nothing wrong with the TW figure, the point is that you cannot add the £514k debtors onto the £808k revenue figure - it is already included in the revenue figure. Revenue was £808k not £1.3million as claimed.
I refer back to my original point, which I queried and answered by SOH. The same was posted on in response to TW comment on his site. I find it odd he didn't question it. No matter, all change in a few weeks.
Elrico , thanks for your response and TW's figures. They are indeed correct, however, he is quoting the cash figure NOT the revenue figure.
So i agree with all outstandings added on the total cash would be £1.3m. I presume this is the figure SOH confirmed to you. This is a decent cash position and one i am happy with.
This is not the same as revenue for the period, hence mine and Spike's observation that you cannot double count revenue.
I think there has been further confusion because the heading to this thread is 'revenue analysis' and you are quoting the cash figure that TW mentioned.
Anyway, I think we've got there in the end. I am not an accountant either BTW