To answer my above question, I don't believe such slashing of costs could occur again for the second time in six months. But I will take a guess and say that costs can be slashed by half that amount. In our favour is that, thankfully, the Queen did not die again. And hopefully payments into the ACC agreement mess will be lower. Plus of course - despite being disgruntled about the performance of AbsoluteIT - our executive team at Accordant remains ever optimistic about a rebound. And they won't be able to rebound if they cut their workforce much further. So I am predicting incremental operational cost savings of half that achieved in the prior period ($13.493m/2). On the interest payment front I am predicting 'no relief'. So let's plug those changes into our spreadsheet model and see what happens. I have added up the two 2024 half years to produce a full year 2024 forecast.
For comparative purposes, I have included the comparative full year figures from FY2023.
Operating Cashflow Analysis |
FY2024 (1) |
2HY2024 (1) |
HY2024 |
FY2023 |
Cashflow from Customers {A} |
$208.395m |
$94.803m (2) |
$113.592m |
$230.322m |
Payments to Suppliers and Employees {B} |
$210.036m |
$101.895m |
$108.141m |
$222.193m |
'Principal & Interest' Lease Liability Payments (Rent) {C} |
$3.012m |
$1.506m |
$1.506m |
$3.403m |
Sum of Operational Payments {B}+{C} or {D} |
$213.048m |
$103.401m |
$109.647m |
$225.596m |
Operational Payments as a %ge of Customer Cashflow |
102.2% |
109.1% |
96.5% |
97.9% |
Operational Cash EBITDA (IFRS16 adj.) {A}-{D} or {E} |
($4.743m) |
($8.598m) |
$3.855m |
$8.129m |
Bank Interest Paid {F} |
$2.480m |
$1.240m |
$1.240m |
$1.683m |
Tax Paid (Refunded) {G} |
($1.073m) |
($2.407m) |
$1.334m |
$2.433m |
Operational Cash EBDA {E}-{F}-{G} or {H} |
($4.910m) |
($6.191m) |
$1.281m |
$4.033m |
Dividends Paid |
$2.156m |
$1.085m |
$1.071m |
$4.309m |
Dividend payment per share |
6.0cps |
3.0cps |
3.0cps |
12.1cps |
Depreciation & Amortisation {I} |
$4.782m |
$2.391m |
$2.391m |
$4.628m |
Operational Net Profit After Tax {H}-{I} |
($9.692m) |
($8.582m) |
($1.110) |
($0.595m) |
c.f. Declared Net Profit After Tax |
$?m |
$?m |
$1.164m |
$1.977m |
Notes
1/ These columns represent estimates.
2/ 2HY2024 revenue estimate calculated as follows:
(0.91x$227.371m) - $112.105m = $94.803m. I am using the assumption that 'cashflow revenue' will equal 'booked revenue' for this period.
---------------------------------
The last table row shows the actual net profit declared over the reported periods. This shows that deriving profits from operational cashflows, and deriving profits according to accounting rules, which also include non-operational transactions, are not the same thing. So perhaps of more interest than the absolute value of derived cashflow profits is the forecast change from FY2023 to FY2024: ($9.692m) - ($0.595m) = ($9.907m). Transfer that across to the declared profits and you are looking at a NPAT
loss of:
FY2023 Normalised net profit = $1.977m + 0.72($1.104m+$0.379m+$0.109m) - $0.016m = $3.107m
Where $1.104m represents a one off ACC scheme adjustment, $0.379m represents an earn out payment for the Hobson Leavy Acquisition, $0.109m a one off impairment, and $0.016m a money gain from a Property Plant and Equipment sale.
Transferring that 'change in cashflow loss' across to actual net profits declared gives us a forecast net profit for FY2024 of:
$3.107m + ($9.907m) = ($6.800m). Ouch!