Hi Zinc,
Yeah, that major contract can't go on forever. Management have been saying for too long that they will lose it. But just how much this will affect the bottom line and the SP remains to be seen.
Obviously, the market is a little concerned. I thought we might see a bounce in the SP, but it hasn't happened yet.
Just realised that the quarterly is out - came out on the 25th, I don't know how I missed it.
Anyway, the numbers look pretty good.
30 June 2004: Net Operating Cashflow $1,053,000
30 September 2004: Net Operating Cashflow $845,000
31 December 2004: Net Operating Cashflow $1,639,000
Year to date operating cashflow is $2.484m
Cash at bank at 31 December 2004 is $5.2m
Interestingly, payments made during the current quarter for working capital declined by around $1.6m while staff costs were up $300K - as opposed to the previous quarter. This occurred while receipts from customers declined 6.6% to $7,987,000.
A little worrying about the decline in receipts, but this could result from timing issues. Otherwise, it's good to see the working capital spend contract.
Anyway, it strikes me that this quarter's cashflow result is outstanding. Two more quarters at this magnitude would yield net operating cash for the 2005 year of $5.7m. Let's hope they can achieve this.
Seems cheap to me, but this is just my opinion as a lay investor.
Caveat: Do your own research and due diligence and get pro investment advice before making decisions.
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