$79,000 August Outflow Leaves Queste With $2.905 Million Consolidated Cash
Queste Communications ended August with just $6,000 in standalone cash, although its consolidated balance remained $2.905 million after a $79,000 monthly operating outflow. The company points to a $450,000 Orion loan facility and listed investments as additional liquidity sources.
- Standalone cash falls to $6,000
- Estimated standalone funding runway of 2.3 months
- Consolidated cash balance of $2.905 million
- $69,000 of unused Orion loan capacity
- Listed investments valued at $1.65 million at Queste level
Standalone cash falls to $6,000
Queste Communications Ltd (ASX:QUE) finished August with a stark split between its own balance sheet and the wider group: standalone cash was just $6,000, while consolidated cash stood at $2.905 million. The company recorded a standalone operating cash outflow of $33,000 during the month, partly offset by $20,000 in financing proceeds.
On the consolidated numbers, operating cash outflow was $79,000 for August. Cash declined from $2.984 million at the start of the month to $2.905 million at month-end. The consolidated figures include Orion Equities Limited (ASX:OEQ), in which Queste holds 59.86% and which it treats as a controlled entity for accounting purposes.
Two-month investing outflow remains unexplained
The more significant movement sits in the year-to-date figures. Consolidated investing activities used $817,000 over the two months to 31 August, although the filing does not provide a further explanation of the payment in the cash-flow report. There was no consolidated financing inflow reported for the period, leaving operating cash flow as the main stated drag on group liquidity.
Queste disclosed $34,000 in related-party payments during August, included in the cash-flow reporting. The filing does not break down the payment beyond identifying it as related-party expenditure, a detail that will need to be read alongside the company’s quarterly activity disclosures.
Loan capacity and listed investments provide support
The company has access to a $450,000 unsecured loan facility from Orion, of which $381,000 was drawn at month-end. The facility carries interest at 10% a year and matures on 31 December 2027, leaving $69,000 available under the arrangement.
Queste also reported listed investments valued at $1.650 million at 31 August, including its 9.37 million Orion shares valued at $1.639 million. Orion separately held listed investments valued at $394,624, comprising stakes in Strike Resources Limited (ASX:SRK) and Bentley Capital Limited (ASX:BEL). Queste says these securities are regarded as liquid assets that can supplement cash reserves, but their usefulness depends on market prices and the ability to realise them when required.
Using current operating outflows, Queste estimates 2.3 months of funding on a standalone basis, versus 36.8 months for the consolidated group. The company says it expects to continue operating because it can draw on the remaining loan capacity and realise listed investments. September’s cash movements will show whether the narrow standalone buffer is temporary or becoming a recurring feature of the company’s liquidity position.
Bottom Line?
The headline risk is not the group cash balance but the $6,000 standalone balance; September will test how much reliance Queste places on Orion funding or investment sales.
Questions in the middle?
- Will Queste draw the remaining $69,000 under Orion’s loan facility?
- What accounted for the $817,000 consolidated investing outflow over the first two months?
- How readily could the listed investments be sold without materially affecting their reported value?
