| Item | FY2024 | FY2025 | FY2026A |
|---|---|---|---|
| Sales | $683,855 | $779,492 | $793,914 |
| Cost of sales | $336,760 | $391,240 | $426,515 |
| Gross profit | $369,779 | $395,597 | $367,399 |
| Gross margin % | 52.3% | 50.3% | 46.3% ↓ |
| Operating expenses | $369,225 | $395,598 | $182,700 ⚠ |
| Net profit before dep'n | $554 | –$1 | $184,699 |
| EBPIDT / SDE | $138,327 | $195,926 | $184,812 |
Revenue growth decelerating: +14.0% (FY24→25) then +1.9% (FY25→26A). Gross profit in FY26A is lower than both prior years despite higher sales — margin compression. IM footnote: accounts "do not separately break out depreciation, proprietor remuneration, or all balance sheet items."
Opex sits at ~$370–395k in FY24/FY25, then halves to $182,700 in FY26A. That single move is what turns ~$0 net profit into $184,699. Most likely the owner's pay was left in expenses in prior years and stripped out in FY26A — inconsistent presentation, not a real cost cut.
No cost was deducted for someone to run it. This is two working owners sourcing, refurbishing and listing 1,488 SKUs. The $184k isn't surplus profit — it's largely a wage for two people. Run it absentee and a manager's ~$80k drops real surplus to ~$95–105k.
GP% slid 52% → 50% → 46% and absolute gross profit is flat-to-down on rising sales. Classic signature of aging stock discounted harder to move it — directly relevant to what you're about to pay for inventory.
Stock is additional and mandatory on top of $150k. The IM quotes liquidation $275k vs retail $550k — a built-in 50% haircut that tells you what this stock is really worth in a hurry. Refurbished / box-damaged / end-of-line electronics depreciate fast and go obsolete; a 1,488-SKU pile almost always hides meaningful dead stock. The declining gross margin is corroborating evidence that stock is getting harder to move.
| Flag | Severity | Why it matters |
|---|---|---|
| 6-week ownership flip (IM p.10) | High | Vendors "acquired six weeks ago," now selling. FY24/25 accounts are the prior owner's — whose numbers is FY26A really? |
| Dyson "exclusive contract" transferability | High | This is the entire moat. If it doesn't assign to a new owner, you're buying a commodity reseller. |
| Owner-dependent sourcing know-how | High | Supplier relationships & refurb process are personal — they can walk out at handover. |
| Channel concentration — three platform landlords | High | Dyson (supply), Trade Me (incl. the new non-transferable API rule) and Google each control a leg of the business — any one can tax, throttle or evict. Diversify the channel mix; don't build hard dependencies on a single landlord. |
| Sourcing capability doesn't transfer; replacement-stock working capital | High | The vendor's personal, undocumented sourcing skill is the real constraint — and it walks. Year-1 runs on the finite consigned pool, but from ~month 6 growth needs purchased replacement stock (~$50–100k ramp, sized off the stock list). Sourcing earnout + documented SOPs + replacement-supplier intros as DD conditions. |
| Inherited pre-settlement warranty liability | Med | Pre-settlement sales carry the 12-month warranty; returns/claims land on the buyer. Quantify (claim rate × pre-settlement units) and fund a warranty escrow/holdback. |
| No written Greg–Dean operating agreement | High | Roles, equity/profit split, decision rights and exit are in no document; the "demand engine is operator-supplied" mitigant makes the buyer the single key-person point of failure. Sign a written operating agreement before the offer. |
| Organic search collapsed −99% (un-redirected migration) | High | ~1,800→13 visits/mo; the "organic" channel in the IM is effectively dead (recoverable). SEO analysis → |
| No balance sheet / working capital disclosed | Med | Can't assess liabilities, debtors, or true cash conversion. |
| Margin compression | Med | Pricing pressure / aging inventory, not a growth story. |
| Dimension | Grade | Note |
|---|---|---|
| Revenue trend | C+ | Growing but decelerating (+14% → +1.9%) |
| Margin trend | D | GP% 52→46%; gross profit flat-to-down |
| Earnings level (SDE) | B | ~$172k avg — verified across 3 yrs of accounts (see Financials) |
| Earnings transparency | D | Inconsistent expense presentation; addbacks not broken out |
| Balance-sheet disclosure | F | None provided |
| Supplier concentration | D | Dyson-led; transferability unknown |
| Channel concentration | D | Three landlords — Dyson, Trade Me & Google each control a leg |
| Organic / SEO channel | F | −99% from un-redirected migration — recoverable (see SEO deck) |
| Owner dependence | D | Two working owners; personal know-how |
| Inventory risk | D | Refurb electronics; 50% liquidation haircut |
| Ownership continuity | D | 6-week flip; double ownership change |
| Deal pricing (headline) | B | Cheap on multiple — but entirely conditional |
| Overall | C− | Conditional — verify the three pillars before proceeding |
TYDI's Dyson supply line and brand-segmentable customer database make it possible to launch focused single-brand specialist sites (Dyson first, Apple next) off one shared back-end. The shopper searching "refurbished Dyson NZ" wants a trusted specialist, not a big-box generalist — and no NZ-owned business owns that niche. Upside: stronger SEO than the generalist site (stuck at #27 for "dyson v8"), higher conversion, tighter ad ROAS, and a portfolio of individually-saleable brand assets.