While strictly correct, the ATM operating profit was a mere $10k last year. Less money than the payment they made to their lowest paid part time cleaner. So within the margin of error ATM make no money, by design of course as all potential profits are being funnnelled into further market expansion. Nevertheless ATM effectively have no earnings and therefore no borrowing capacity.
As for having cash in hand, actually you don't know that.
What we do know is that plans to raise more cash are well underway. If there was sufficient cash about they wouldn't be doing that. We also know that cashflow from operating activities shrunk down from $3.647m in FY2013 to a mere $435k in FY2014. We know that the actual cash balance the company has shrunk from $20m in FY2013 to $16m in FY2014 (EOFY 30th June). We also know that due to taking legal action in Australia, cash costs going forwards will be higher than budgeted for. So I would guess the cash balance is now somewhat less than $10m based on those trends. Pretty pathetic for a company that the market values at more than $400m.
I suppose pulling out of the loss making UK market might help.Quote:
All they would need to do is slow down their expansion plans.
Probably true. But this doesn't change the fact that ATM are severely short of capital and they will not want to wind back their expansion plans before their intellectual property patents start to expire.Quote:
The plan to increase capital as far as I can see is simply in order to fund a faster growth rate in the US, which has to be their best market.
SNOOPY