WDT - Wellington Drive Technologies

[h2so4]

I have followed blindly WDT for a long time.30cps makes me think its not heading out the back door but it is really is 1.5cps from before the split.love to here any thoughts on wdt i,m still clinging on the old ceo,s words.it would be nice to get some good news

Hey prendi

WELCOME

Compared to 2010 1HY WDT didn't burn as much cash, that's good.

Turnover is up, that's good.

[Lizard]

Wow, all of a sudden, offer sits at 17cps on my screen, with last sale at 28cps.... so presumably Winner and Belg have given up accumulating and we can all go back to sleep?

[Anna Naum]

Wow, all of a sudden, offer sits at 17cps on my screen, with last sale at 28cps.... so presumably Winner and Belg have given up accumulating and we can all go back to sleep?

Lizard, dont you mean the BID is 17c and OFFER is 28c.

[Lizard]

Oops. Yes, one of those days... never been good with left and right either... near divorce material when attempting to navigate in the UK.

[Anna Naum]

Oops. Yes, one of those days... never been good with left and right either... near divorce material when attempting to navigate in the UK.

Haha, try Los Angeles with all those freeways, even with a GPS unit we nearly ended up going to Vegas to get a quicky (divorce)

[kiwi_on_OE]

It's that time of year again, eating too much, holidays, WDT cash issue etc.

They burnt $6m in the first half and had $5m left in the bank at the start of the second half. I wonder how they have done since.

Ziehl-Abegg AG deal in Oct suggests to me that they had about $8m of inventories to rundown by selling to ZA by end of Mar, so maybe they've got $3m of that in cash by now. Additional costs to WDT of about $1m to be included in this deal. So maybe another $4m (net) to come in.

I hope that sales, margins and costs in the second half have all gone the right way, but I can't imagine they are greatly changed. A loss excluding the ZA deal of at least $4m for the half year seems pretty likely to me. I could guess at a similar figure for their cash burn.

Overall it would be loss of about $10m for the year, not much reduced from previous years, but at least the cash burn wouldn't be so bad. To me the sales, margins and cash burn are the main points to look at.

So if they had $5m, burnt $4m and got $3m for running down their inventory maybe they've got $4m left at the moment. Could they keep their cash at about those levels as they get a further $4m from the ZA deal and burn a similar amount in the next half. If half year losses are then below $4m maybe they can hold out until the end of next year before they need more cash. I wasn't expecting that when I started thinking about their possible numbers.

With gross profit maybe around $5m and expenses around $14m it still looks like they have to do something pretty amazing with sales or margins to break even ie. more than double them, even if they can cut expenses as they intend. But just maybe they can hold off on a cash issue for a while.

I always seem to have rose-tinted glasses on when guessing WDT numbers, even so the light at the end of the tunnel seems to be a fair way off.

[Lizard]

I'm working on net loss (before tax) of $3m in second half and cash burn of $0.6m. Excluding restructuring costs, that makes for $7.6m loss for FY11 and total $6m cash burn, despite $4.3m reduction in working capital. I have $39m in sales for FY11.

Then my figures have them to burn $2.5m in 1H12 and another $1.1m in 2H12... dropping off to $0.5m cash burn in 1H13 before turning positive.... if they can achieve this, they may get through, as that's a total of $4.7m cash burn against $5.1m of cash.... Lots of IF's until we get there. It relies on about $53m in sales for FY12 at an increase in gross margin to 18.1% (based on being able to get somewhere close to where they need to be and on excluding low margin ventilation business). Moving up to 19.5% in 1H13...

...is that enough predictions?

Main point is, that it gives me something to quickly measure against when their results come out... can see if they are going to be on track or not.

[Lizard]

I'm working on net loss (before tax) of $3m in second half and cash burn of $0.6m. Excluding restructuring costs, that makes for $7.6m loss for FY11 and total $6m cash burn, despite $4.3m reduction in working capital. I have $39m in sales for FY11.

Okay, predictions in my last post are a little optimistic and will be cutting it finer than would like to see.

They burned $1.0m more in second half op cashflow, plus about another $0.7m in investing cashflow. Sales were only $35m, so I was more than 10% off for full year, having seen little growth in second half over prior (possibly to do with ventilation business wind-down).

Margins are getting there at 11%.

Then my figures have them to burn $2.5m in 1H12 and another $1.1m in 2H12... dropping off to $0.5m cash burn in 1H13 before turning positive.... if they can achieve this, they may get through, as that's a total of $4.7m cash burn against $5.1m of cash.... Lots of IF's until we get there. It relies on about $53m in sales for FY12 at an increase in gross margin to 18.1% (based on being able to get somewhere close to where they need to be and on excluding low margin ventilation business). Moving up to 19.5% in 1H13...

They are only forecasting 17% margin for FY12, but exchange rate will be putting the pressure on. I also think I am way off with my revenue predictions there - without revenues from ventilation, it could be lower than 2012. However, on the key points we agree (though it will be tighter than I'd like) - they will likely make it through without further capital raising if they can adhere to plan. They also pretty much agree with my timeframe on cash burn in predicting operating profitability from beginning of 2013. So you can all go back to sleep for another six months or so.

...then we can see if they're still on track and what the signs are for future revenue. That really needs to keep growing if 20cps is to look "super-cheap" enough to wake investors from their Rip-Van-Winkle slumber in the waiting room.

[winner69]

Maybe after getting out of ventilation they will get out of electric motors .... and then survive on hope

[percy]

That really needs to keep growing if 20cps is to look "super-cheap" enough to wake investors from their Rip-Van-Winkle slumber in the waiting room.

I wake up straight away when the word "profit" is mentioned and go on "full alert" mode at the word "dividend".In the meantime it is more profitable to enjoy my Rip-Van-Winkle slumber in the waiting room.