As my maiden post in the strawman community, decided to work up a rough forecast of Zoono's revenue moving through to FY25 as a way of guaging expected revenue and returns. Have trawled through all ASX announcements to work up a summary of the current distributor agreements and their expected revenue streams based upon the stated agreement terms and conditions. Forecasting their revenue is difficult as these sales targets are not guaranteed however this does provide an opportunity to work up a rough picture of what their revenue stream could look like. See attached the spreadsheet which also then takes a view on calculating the current NPV which I'll reference in my valuation. Couple of points to note

• Forecast doesnt take into account any other revenue sources from one off sale purchases, B2C online sales, potential future distributor agreements or pipeline opportunities which has been eluded to in interviews and VC's. As a result of this, revenue growth stagnates based upon current agreements
• Baselined sales and operating costs from 1H21 financial report and worked to upto a % of overall revenue assuming some scaling of resources to meet demand (a reflection of changes in the most recent business update).  

Overall there is a substantial portion of revenue forecasted which is as a result of the pandemic and no doubt all agreements from 2020 onwards have been structured in response to expected demand with forecasts made for after the pandemic once structural changes to society take hold. 

The pandemic has created a heightened awareness towards microbial and viral controls and Zoono will no doubt benefit from their position within the marketplace however time will tell to what degree the vaccine will alter protocols towards health and safety standards.

Think it is expected that the sales forecasts for agreements made at the start of the pandemic are potentially inflated and these should be discounted somewhat however there is further scope for growth which sits outside of the revenue forecast as noted in the clarification above. Failure of distibutors to hit targets is also a risk and this has been evident over the past couple of years through legal proceedings. Monitoring the performance of existing agreements is hard and can only be done on a gross revenue level.

Prior to the pandemic Zoono were increasing market share of the back of a revised B2B strategy and still have good growth prospects in agriculture and china in general. They have eluded to strong market interest in numerous industries and no doubt industry/governments will look to microbial controls as a way of safeguarding and kickstarting  the economic recovery for the next few years in essential industries. 

A conservative valuation still places their current share price below intrinsic value and should the SP continue to fall this would afford for a healthy margin of safety. Consistent monitoring would need to be in place to ensure Zoono capitalises on further sale prospects whilst existing distrbitutor agreements maintain their targets and monthly revenue trends in the right direction. 

Currently dont hold shares but would look to invest if the share price stays at (or drops below) the current level with a couple of announcements RE new agreements being made along the way. Risk that business activity subsides as recovery progresses is one to be monitored moving forward.