PEB - Pacific Edge Ltd

[Balance]

Operating revenue $4.2m, not a bad one really.
Revenue growing much faster than (now) decreasing expenses.
Assuming no change to losses (8.9m for the half) coukd operate comfortably for over a year - surely that means something

Decreasing expenses? Actually no - expenses actually rose from $12.198m to $$13.517m - $1.319m or 11% increase. The EEEIS charge of $2.925m last half year was well and truly a one-off*!

Revenue grew by $1.226m so it is simply untrue that revenue is growing faster than expenses! In fact, expenses continued to grow faster than sales.

Then there is the evergreen and relentless growth of receivables - sales grew by $1.226m and receivables grew by $1.6m! After writing off $647k this half year and $2.635m last financial year! History tells us what the growth and growth of receivables mean.

No need to analyse any further - the picture is actually very very very clear where PEB is heading.

* Amazing how often one-offs are used to justify set-backs but ignored when it is the reverse!

[bulyak]

Been watching this one for years. The only way forward is a buyout or Darling steps down. Darling alone probably cost this company about 3 million minimum a year, based on his salary and travel expenses. The guy only goes first class between Pennsylvania, USA and NZ on a regular basis. I'm guessing at least every fortnite. What an insult to long term shareholders that keep putting cash in every time they run out. What happened to the Vet Hospital contracts in the US and how is it going with Kaiser? I bet some institutional holders have put a hit on him. The CEO is more concerned about the small stuff. Quit making excuses and execute. Bloody hell.

[Snow Leopard]

They seem to keep using the word 'when' where they should be using the word 'if'.

Cash flow not improving and Cash flow is everything.

Best Wishes
Paper Tiger

[whatsup]

Been watching this one for years. The only way forward is a buyout or Darling steps down. Darling alone probably cost this company about 3 million minimum a year, based on his salary and travel expenses. The guy only goes first class between Pennsylvania, USA and NZ on a regular basis. I'm guessing at least every fortnite. What an insult to long term shareholders that keep putting cash in every time they run out. What happened to the Vet Hospital contracts in the US and how is it going with Kaiser? I bet some institutional holders have put a hit on him. The CEO is more concerned about the small stuff. Quit making excuses and execute. Bloody hell.

Don't forget IMO that darling Darling came out of the Fletcher fold, talk about wealth distruction from the 1980's on .

[Balance]

Don't forget IMO that darling Darling came out of the Fletcher fold, talk about wealth distruction from the 1980's on .

His behavior of making outlandish statements about:

excitement,

trans formative,

successful user programs to bring in BIG customers,

many millions of customers potential etc etc

while milking the company of millions of dollars of benefits and salaries and share options for himself and his co-managers, without putting back a single cent when the company desperately needs funds raised during the rights issues, tells the story of why PEB will finally bite the dust.

[winner69]

His behavior of making outlandish statements about:

excitement,

trans formative,

successful user programs to bring in BIG customers,

many millions of customers potential etc etc

while milking the company of millions of dollars of benefits and salaries and share options for himself and his co-managers, without putting back a single cent when the company desperately needs funds raised during the rights issues, tells the story of why PEB will finally bite the dust.

DD did get Arbogen off the ground ....that mght be a commercial success one day as well

Don't forget DD definition of commercial success is to get science out of the lab and getting somebody to buy it (how many don't count as long as its more than 1 its a success) ......and I don't think DD in his long career has ever signed off a P&L with a positive number at the bottom

[When the bass drops]

Been watching this one for years. The only way forward is a buyout or Darling steps down. Darling alone probably cost this company about 3 million minimum a year, based on his salary and travel expenses. The guy only goes first class between Pennsylvania, USA and NZ on a regular basis. I'm guessing at least every fortnite. What an insult to long term shareholders that keep putting cash in every time they run out. What happened to the Vet Hospital contracts in the US and how is it going with Kaiser? I bet some institutional holders have put a hit on him. The CEO is more concerned about the small stuff. Quit making excuses and execute. Bloody hell.

Though I don't disagree with your justified frustrations, I'm just wanting to get a bit of clarity around your claims regarding what DD costs PEB. About 3 years ago, possibly around the time PEB was in the NZX50, his salary was in the $300k - 400k range. I don't expect this would have gone up too materially in this time. Is your claim he rakes up (conservatively) $2m a year on travel well sourced? i.e. you have good authority on what he is costing PEB. I will say that if your $3m figure is close to reality, this is alarming. Making 20-25 first class return trips each year (for one person) at that distance would be near scandal (lets say $50k each trip flights and accomodation). I just want to check your $3m figure is well-founded.

[bulyak]

OK. Here we go. Salary of $530K give or take based on 2017 annual report. Share incentive scheme for 2017, he was issued with 1,635,000 shares/options at roughly $.50 per share = $800K give or take. So about 1.3 to 1.5 million in salary. Travel expense, flights only. 20 trips all 1st class @50K per trip, apparently he also has some special room at all the Air New Zealand Koro Lounges. $1million. Throw in all the other expenses. 1st class accommodation while travelling, housing and living expenses in the US. Housing allowance for his family while overseas. This guy only eats at the best restaurants and I'm guessing when you are trying to entice Kaiser and every oncologist in the US, the budget would be endless. Employee allowance. 3 million is probably on the conservative side. If he had any confidence in delivering, he would forfeit his salary and instead base it 100% on performance. That's the person I want to back.

[When the bass drops]

Yep, your reasoning is ok on some of that. Though the 1,635,000 won't be an every year thing. $50k for first class is super top end, perhaps he would sit with the pilot. Business Class to Pennsylvania or Baltimore is likely to be $15,000 return Air NZ, perhaps he does Emirates or Etihad only and flies with a Prince. Emirates you'd be looking at $35k return for top end First Class.

It would make more sense if some sophisticated US based sellers did some of the wining and dining to save costs. Maybe 5 trips a year is more prudent/sensible.

Ofcourse, we're just speculating on all the above.

[winner69]

My morbid fascination with Pacific Edge continues so continue to update the financials ....that still lead into a DCF valuation

The only true number in the financials are found in the Cash Flow Statement

Here's the last few years numbers all in one place (broken down into half years)

Now tell what's changing from one half year to the next .....not much at all .....maybe even getting slightly worse. Isn't taht receipts line horrendous but never mind all the invoices are piling up just waiting for the OK for them to be paid (turned into cash)

Never mind one day we might see some real big numbers

I'm allowed to make comment because I did once donate $15k in cash to the company to keep the good work going (or subsidise dear Davids expensive habits)