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TEAC In Trouble, How Long Will They Last?

Struggling consumer electronics group TTA Holdings who trade in Australia as TEAC has reported a $311,000 loss on a turnover of only $5M for the last quarter.

Analysts had expected the Melbourne based Company to exit the Australian market after pulling out of the large sized TV market in 2016. Today the Company only sells a 20″ DVD Combo TV and a 32″ HD TV. In the past they were a major sponsor of V8 racing and were often seen advertising on free to air TV.

Today Company is also selling a multitude of bottom end products via the likes of Harvey Norman, including digital radio’s, soundbars and DVD players.

The big question now is whether TTA Holdings Limited (ASX: TTA) will have to raise more capital soon to continue trading in Australia.

Currently TTA Holdings is spending more money than it earns, it will need to fund its expenses via external capital injections.

Currently, TTA Holdings has A$0.95M in cash holdings and producing negative cash flows from its day-to-day activities of -A$1.17M.

Wall Street analysts claim that the most significant threat facing investor is the company going out of business when it runs out of money and cannot raise any more capital.

TTA Holdings operates in the CE distributor industry, which delivered a positive EPS of A$0.2 in the past year.

This means, on average, its industry peers such as Tempo and Laser Corporation operating are profitable. TTA Holdings runs the risk of running down its cash supply too fast or falling behind its profitable peers by investing too little claim observers.

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