- Shares in tyre processor Pearl Global (PG1) entered a trading halt just before the weekend as the company prepares for an equity raise
- The trading halt follows Pearl’s quarterly report, which saw the company more than triple its customer receipts in the September quarter
- Pearl’s quarterly production volume was also up by September’s end — the company converted more than 1100 tonnes of waste tyres during the period
- Despite the growth, Pearl’s operational costs got a little steeper, and the company went cashflow negative by over $1.5 million
- The majority of the tyre processor’s cash burn was caused by steeper product manufacturing and operating costs, which landed at just under $2 million
- As a result, Pearl has enough funding to last just two more quarters — which could explain why it’s tapping investors once again for fresh capital
- Company shares last traded for 9.4 cents on Thursday, October 29
Shares in tyre processor Pearl Global (PG1) entered a trading halt just before the weekend as the company prepares for an equity raise.
The trading halt follows Pearl’s quarterly report, which saw the company more than triple its customer receipts in the September quarter.
Compared to FY20’s final quarter, Pearl’s cash receipts increased by 220 per cent to $1.65 million.
It’s an even bigger spike in the year-on-year (YoY) statistics. The company brought in just $240,000 in customer receipts this time last year.
Pearl’s quarterly production volume was also up by September’s end. It converted more than 1100 tonnes of waste tyres during the period, up from the 1016 tonnes processed in the June quarter.
Even though Pearl Global tabled a healthy revenue spike and upped its production, its operating costs did increase throughout the quarter.
With cash receipts as the only inflow on the company’s operating balance sheet, Pearl went cashflow negative by over $1.5 million.
The majority of the tyre processor’s cash burn was caused by steeper product manufacturing and operating costs, which landed at just under $2 million. Staff costs followed with an $852,000 expense.
Pearl also burnt through over $750,000 on investing activities during the quarter, while the company spent $178,000 repaying a portion of its borrowings.
Despite the deepened cash burn, Pearl did bank a healthy $3.1 million cash injection in early August. The capital raise formed part of Pearl’s two-tranche $5 million placement, which was announced in June.
Considering the higher net cash outflows, however, the company’s bank balance only marginally increased from June through September.
As a result, Pearl has enough funding to last just two more quarters — which could explain why it’s tapping investors once again for fresh capital.
Shareholders will have to wait until early next week to find out more about the raise — Pearl shares are set to resume trade by Tuesday, November 3.
Company shares last traded for 9.4 cents on Thursday, October 29.