Why Surfstitch fell prey to voluntary administration?

Appointment of Administrators: For over twelve months, the businesses of Surfstitch Group Limited (ASX: SRF) have been faced with several significant, external challenges including two class actions, the protracted Coastalwatch litigation and an ASIC investigation. Notably, these challenges have been said to bring high levels of uncertainty and material costs that became outside of the control of the Group operational businesses, while impacting the Companies’ cash flow position. Subsequently, considering the Board’s continuous assessment of the Group’s financial position and as part of its ongoing efforts to optimise business operations, it has been decided to appoint the administrators for listed entity and its holding company (SurfStitch Group Limited and SurfStitch Holdings Pty Limited) respectively. Accordingly, John Park, Quentin Olde and Joseph Hansell of FTI Consulting have been appointed to act as Administrators. However, the Group’s on-line companies, SurfStitch (Aus), SurfDome (UK) and Swell (US), and publishing businesses MagicSeaweed (UK) and Stab (Aus & US) are unaffected by the Appointments and will continue to trade as normal. Customers will continue to receive their merchandise as usual and suppliers and employees will be paid in the ordinary course of business.     

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Why we think Somnomed Limited shares can soar higher?

Strong Q4 growth across geographies: SomnoMed Limited (ASX: SOM) reported strong sales in the US during the quarter (+24% over prior year), combined with ongoing strong Q4 growth in Europe (+20.6%), resulted in record total group unit quarterly sales of 19,859 units (+24.2%). Total device sales for the FY17 stood at 68,100 units. Unaudited quarterly group revenues grew by 22% yoy to $14.3 million (+22%) and total group revenues grew by 12% yoy to $49.3 million. Renew Sleep Solutions (RSS) opened its seventh center during the month of June, to end its first 7 months of trading with an exceptional operational performance. With the latest center in Phoenix, SOM continues its commitment to expand network of treatment outlets across the US. Moreover, the company remain confident that “Direct to Patient” initiative will continue to build in line with or above current expectations in terms of patient inquiries, appointments and treatments. Notably, SomnoMed’s sales in North America, which had seen the impact of a reaction to a perceived channel conflict linked to the establishment of RSS, reported its best quarterly results in the quarter for FY17. US sales grew by 24% and the North American region, including Canada, grew by 31.8% in Q4.

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Xero still going strong

Recently, Xero Ltd.’s non-executive director Craig Winkler has reduced his shareholding to 10.5% (from 12.7%) to fund his private charitable trust. Winkler is a Director of Givia, the trustee for a private charitable trust and remains Xero’s second largest individual shareholder (via Givia) after Xero’s CEO, Rod Drury. Further, Winkler has informed Xero that he will seek to distribute 100% of Givia’s assets over approximately a 10-year time frame. Over that period, Givia will sell its portfolio holdings, including Xero shares, to fund its charitable giving, and stated its intention to manage its shareholding sale processes to minimize impact on the market. For FY17, operating revenue has surged about 43% to $295.4 million (51% rise when excluding currency movements) while the subscription revenue surged 44%. XRO has been able to grow its customer base by 44% to just over 1 million customers globally during the period and net subscriber additions for the year were 318k. There was also an improvement in net loss after tax to $69.1 million from $82.5 million of last year alongside improvement in EBITDA loss and gross margin percentage. XRO has hit positive operating cash-flow for the first time in the second half of the year, and has $113.7 million of cash and short-term deposits.

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One small cap wine company to buy – Australian Vintage Ltd.

Australian Vintage (ASX: AVG) has reported that it crushed 93,000 tons of grapes from the 2017 vintage compared to 99,000 tons last year, decreased by 6,000 tons compared to last year due mainly to a reduction in volumes processed for external customers. Yields from owned and leased vineyards are marginally above expectation and in line with last year. The 2017 vintage has again been an outstanding vintage, with strong indications of very high quality, while the cool weather conditions delayed the vintage, the quality has again been exceptional and the Australian industry harvest tonnage looks to be up from 2016. Total volume sales to the end of April 2017 are 6% below last year due to reduced bulk wine and cask sales. Sales volumes of 3 key brands, McGuigan, Tempus Two and Nepenthe are up 5% against last year but this has not translated into increased sales dollars due to the unfavorable foreign currency. Actual sales of the three key brands has declined by 8% and all of this is attributable to the exchange rate. However, the increased focus on the higher priced Tempus Two brand has resulted in a 29% volume growth and a 23%-sales dollar growth. The Company continues to focus on increasing branded sales and at the same time improving the efficiency of the business and quality of outstanding wines. The company maintains its earlier net profit guidance of $4.1 million for 2017.

 

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During Q1FY17 (ending March 31, 2017) Freelancer Ltd reported a 20% yoy growth in cash receipts at $12.5 million on a rolling 12-month basis, with strong positive operating cashflow of $2.1 million.

During Q1FY17 (ending March 31, 2017) Freelancer Ltd reported a 20% yoy growth in cash receipts at $12.5 million on a rolling 12-month basis, with strong positive operating cashflow of $2.1 million. Q12017 witnessed a strong bounce in accepted projects as issues in the core desktop project funnel were corrected in mid-January 2017, while projects posted on mobile reported an exceptional growth of 79% yoy during the quarter. Moreover, the company’s advantage lies in the revenue composition as USD is the main operating currency of the group and contributed to 75% of revenue in FY16. The company held cash and equivalents of A$34.7 million with no debt on balance sheet as on March 2017.

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Two Australian technology stocks to buy – Freelancer Ltd and iSentia Group Ltd

During Q1FY17 (ending March 31, 2017) Freelancer Ltd reported a 20% yoy growth in cash receipts at $12.5 million on a rolling 12-month basis, with strong positive operating cashflow of $2.1 million. Q12017 witnessed a strong bounce in accepted projects as issues in the core desktop project funnel were corrected in mid-January 2017, while projects posted on mobile reported an exceptional growth of 79% yoy during the quarter. Moreover, the company’s advantage lies in the revenue composition as USD is the main operating currency of the group and contributed to 75% of revenue in FY16. The company held cash and equivalents of A$34.7 million with no debt on balance sheet as on March 2017.

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One technology stock doing well – Nearmap Ltd

Launch of NZ capture program and first commercial sale: NEA has completed a one-off capture of New Zealand’s main economic areas during the period, and has already secured the first commercial sales of the imagery to its Australian customers. The pilot capture program was completed in March and covers approximately 72% of the New Zealand population. Further, this pilot program allows the company to explore the expansion of Nearmap’s world leading technology in the global location content market. For H1FY17, Nearmap posted a revenue growth of 38% year on year (yoy) to $19.4m while EBIT grew by 46% yoy to $10.2m led by solid growth in both Australia and the US. The stock has declined 11.6% in the last six months as on July 04, 2017 over investors’ concerns on NEA’s expansion into the USA, while it has moved up 12.9% in last one month. Given the increasing market opportunity for aerial imagery (market opportunity of USD$1.5 billion in 2017) and NEA’s leadership in Australia, while disrupting the larger US market, we expect the company’s financials to improve.

 

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2016 ALL ORDINARIES ASX Small Cap Stocks Australian Small Cap Dividend Stocks S&P/ASX Emerging Companies Index Uncategorized

Creso Pharma Limited Pipeline of launches

Pipeline of launches: Creso Pharma Limited (ASX: CPH) reported that they are on track to launch their CannaQix human health nutraceutical product in anxiety and stress segment by first quarter or second quarter of 2018. They are also aiming and line extensions in bone metabolism by second quarter of 2019. The products use proprietary Swiss delivery technologies which would boost the bioavailability and absorption of their active ingredients. In May, importation of medicinal cannabis in Australia happened while the first patients are currently getting CanniMed oils via Creso’s partner, Health House International. Creso Pharma is targeting to import medical cannabis products into the Asia-Pacific and Latin American regions from Switzerland, post their deal with Cannapharm AG. Meanwhile, Creso Pharma is aiming to launch several SwissVit premium nutraceutical products across the Asia-Pacific region and Australia. These premium, high-quality nutraceutical products are collaborated with INNutriGEL Switzerland using the INNutriGEL SoftGums proprietary delivery technology that was specifically formulated for that range. SoftGums are made from vegetable starch, and not animal waste material like current gelatinbased vitamin competitor supplements on the market.    

 

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Stemcell United Ltd Exploring options for Asia market

Exploring options for Asia market: Stemcell United Ltd (ASX: SCU) reported their signing of a Letter Agreement with iCAN Israel-Cannabis to negotiate and execute a mutually agreeable licensing and services agreement. ICAN would offer services to the group with respect to their business operations in Asia. Moreover, an investment agreement would be made with the group for over 5% to 10% stake in ICAN, subject to due diligence. The group believes that iCAN end to end services would boost their capabilities and scope of business in Medical Cannabis field. ICAN would assert to an idea germination development and review through clinical trials and importantly the medical delivery systems; as well as the appropriate marketing and branding. If the deal is signed, the will be able to expand their services in Asia market. Meanwhile, Stemcell United reported their initial revenue from sale of dendrobium product in the last quarter and started marketing of their dendrobium essence infused mask this quarter. Moreover, the group is also in discussion with a Chinese Pharmaceutical firm on offering consultancy services for manufacturing resins. Stemcell United is planning to strengthen their capital position and intends to issue up to 25 million ordinary shares at $0.10 per share to sophisticated investors. The group intends to use these funds for their working capital and developments like scaling up dendrobium business and exploring opportunities in Cannabis business. SCU would get shareholder approval if the issue of the shares exceeds the 15% capacity.

 

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Auscann Group Holdings Growing flexibility to prescribe cannabinoid medicines for critically ill patient

Growing flexibility to prescribe cannabinoid medicines for critically ill patients: Auscann Group Holdings Ltd (ASX: AC8) stock generated outstanding returns in the last six months over 102.3% (as of July 7th, 2017). The rights have been restored to access cannabinoid medicines via a TGA’s Special Access Scheme Category A. Accordingly, Australian medical practitioners will be able to prescribe cannabinoid medicines to critically ill patients. The Therapeutic Goods Administration (TGA) have two access pathways in enabling Australian medical practitioners to prescribe unregistered cannabinoid medicines – the Authorized Prescriber Scheme (APS) and the Special Access Scheme (SAS) Category B. Both of them need medicinal practitioner to apply for and wait for approval from the TGA prior to being able to prescribe. The group believes that excluding cannabinoid medicines from this pathway was not needed as the cannabinoids have the safety evidence from pre-clinical and clinical studies. On the other side, after delivering an outstanding rally, the shares of Auscann Group have cooled down in the last three months, declining by 37.8% (as of July 7th, 2017). Meanwhile, the shares recovered over 11.2% in the last four weeks (as of July 7th, 2017) and we believe the bullish momentum in the stock would continue in the coming months.

 

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