Murray Cod Australia has told the ASX supply constraints are to blame for its negative cashflow – but it would be back on track as soon as its stock was fattened up.

In a response to an ASX query, the company (ASX:MCA) said it would continue to operate in the red until it completed the expansion of its operations.

“The Directors believe this short-term growth will improve shareholder value in a shorter time frame than originally anticipated,” chairman Ross Anderson wrote.

Its December quarterly reported negative net operating cash flows of $661,000, with $1.2 million left in the bank at the end of the quarter.

All this despite a significant increase in demand for their fish.

When the company listed at the end of 2016 their production capacity was just 36 tonnes and now has increased to over 1,000 tonnes to meet demand, largely from Asia.

But it takes time to fatten the fish up, and there was still a minimum 12-month lead time for the stock to reach the right size for sale.

The company has roughly 300,000 fish stocked in ponds – after 8000 died in a pond failure late last year – and an additional 220,000 expected in the next month.

It told the ASX in the mean-time it would continue to count its pennies and look for alternate means for funding their operations – not ruling out sale and leaseback, debt or issuing additional equity.

Shares in the company were trading at 7c on Wednesday to give it a market cap of $24 million.