The $50k Challenge Update 14 – 14/07/2020
Stock Code: 8CO
Shares Purchased: 255,000
Share Price: 0.065
Reasons for Buying:
- Management own 25% of the register
- No Debt
- $1.8m Cash in the bank
- Major clients including various Australian Government departments
- Financial Analysis:
- FY20 revenue up 8%. This would have been much higher if not for COVID impacts
- SaaS revenue up 30% in FY20
- The company achieved a net operating cash inflow of $46k in Q4 2020. This was the companies second positive operating cashflow quarter of the year.
- Impacts of COVID have started to subside with the last week of June experiencing a threefold increase in activity compared to April 2020.
- Enterprise value of only $11m provides high potential for future share price appreciation growth once revenue growth returns to normal as COVID lockdowns ease further.
- If COVID restrictions do not ease in the short to medium term revenue growth will be difficult to achieve.
- The company has sufficient cash in the bank, however if COVID impacts persist the company may seek to raise additional capital.
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