M8 Sustainable Ltd Releases Quarterly Activities Report for June 2023
M8S (M8S) Share Update July 2024 Tuesday 23rd
M8 Sustainable Ltd Announces Quarterly Activities Report
M8 Sustainable Ltd (ASX: M8S) has released its quarterly activities report for the period ending 30 June 2023, highlighting significant company updates and financial details.
Instant Summary:
- Execution of a Deed of Company Arrangement (DOCA) for M8 Sustainable Ltd and Fernview Environmental Pty Ltd.
- Return of control to M8S and Fernview Environmental directors.
- Fernview Environmental Pty Ltd ceases to be a fully owned subsidiary of M8S.
- Operating activities resulted in a net cash outflow of $3,224k.
- Investing activities led to a net cash outflow of $455k.
- Financing activities resulted in a net cash inflow of $3,630k.
Company Updates
On 1 June 2023, McGrathNicol executed a pooled Deed of Company Arrangement (DOCA) for M8 Sustainable Ltd and Fernview Environmental Pty Ltd. This arrangement aimed to address financial challenges and restructure the company's obligations.
By 6 June 2023, control of M8S and Fernview Environmental was reverted to their respective directors. As a part of this transition, Mr. Rodney Illingworth ceased his role as a director of M8S, and Fernview Environmental Pty Ltd was no longer a fully owned subsidiary of M8S.
Financial Overview
During the reporting period, M8 Sustainable Ltd experienced significant cash flow movements:
- Operating Activities: The company used $3,224k in total, with receipts amounting to $167k, including $153k from customers and $14k from interest. Payments totaled $3,391k, covering manufacturing and operating costs ($1,585k), employment costs ($1,248k), and other expenses such as insurance, legal, IT, and professional fees ($537k).
- Investing Activities: A total of $455k was used, including $100k for director indemnity of Fernview Environmental Pty Ltd and $355k for the purchase of plant and equipment.
- Financing Activities: The company received $17,328k from M8 Holding Ltd as a contribution towards the DOCA to repay debt, resulting in a net cash inflow of $3,630k after settling a $13,698k loan from Remagen.
Debt Settlement and Future Outlook
As of 30 June 2023, M8 Sustainable Ltd has settled all payments to suppliers and debts owed to Remagen and Reforme Capital in accordance with the DOCA terms. Consequently, Fernview Environmental Pty Ltd is no longer a subsidiary, and the company has no other capital commitments as of the report date.
This announcement was authorized for market release by the Board of Directors.
The execution of the DOCA and the subsequent return of control to the directors is a significant step for M8 Sustainable Ltd. This restructuring is expected to stabilize the company's financial position and potentially improve investor confidence. However, the removal of Fernview Environmental as a subsidiary and the cessation of Mr. Rodney Illingworth's directorship may have mixed reactions from investors.
Investor Reaction:
Analysts have noted that the successful execution of the DOCA is a positive development for M8 Sustainable Ltd. Some investors are optimistic about the company's future prospects, while others remain cautious due to the recent financial challenges and changes in leadership.
Conclusion:
Investors should closely monitor M8 Sustainable Ltd's future updates and financial performance. The company's ability to manage its operations effectively post-restructuring will be crucial in maintaining investor confidence and ensuring long-term stability.