Corporate,
If this was a business that collected receipts on a daily/weekly basis, then I can see your point.
However, its revenues are contracted and paid on extended terms of 30-120 days, so in the meantime it needs to pay for operating expenses and the like.
The rate of expansion with respect to personnel has been big. At one count there were 30 positions to be filled. Also a couple of new offices established.
Millions of dollars on these items, without considering regular operational costs that would also need to be paid until the cash bagan rolling in.
The work was mainly undertaken in the second half and in the case of the Chinese Gas Tank deal, very late in the second half. All that work was funded out of existing cash balances until they were invoiced and received payment.
I do not know this as a matter of fact, but simply joining the dots given what we know about the nature of the contracts and timing.
10 million on hand after accounting for operating and expansion costs is not too shabby.
I would expect all the work completed in 09 to be paid for by September, so we should realistically have received payment for at least 80% of the invoices by the August release of accounts.
Take away on going operational expenditure and it might just come to about ~25m cash on hand.
That would be a pretty good result IMO.
I thought a couple of posters summed it up quite nicely:
- while the company makes 2m profit per week, we wonder why someone is selling
- if the SP was higher, would we be asking these questions?
ETC
entertainment media & telecoms corporation limited
