RE:Organic growth vs inorganic growth Interesting analysis TJ, but it seems to me looking at the cash position that the Inorganic Growth runway is effectively closed off unless we see another captial raise - which would obviously be highly dilutionary at the current share price.
Although the Q2 results are decent on most metrics and Steve is flagging future acquisitions in his commentary, the cash generation just isn't happening at these levels The cash balance on these results is static at 775k Quarter on Quarter and looking forward Note 15 refers to an agreement to pay consultancy fees of up to 1 M related to the KESM acquisition over the next year in 12 monthly installments.
Add in the rather abrupt resignation of the CFO after less than a year in the job and it would appear that Ackroo's preferred inorganic strategy is effectively stalled.
Can the current Organic Growth move the dial? Well, increased YOY revenue of 14% is certainly encouraging, but I'd be concerned about cost pressures coming home to roost over the next period. Also the attrition rate of 10% is higher than I would have expected - one of the attractions of typical loyalty companies is the stickiness of the subscription revenues.
So, I'd have to conclude the jury remains out on the Organic Growth strategy as well.
Harry