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@travelightor, Whenever I reconcile my financial model to...

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madamswer

16,409 Posts.

7971

03/03/17

12:48

Post #: 23076353
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Originally posted by travelightor ↑

I've just finished updating my spreadsheet for ASW (been a bit lazy lately).

Does anyone notice that the half year report has a number of mistakes in it?

- The figure for Profit Before Income Tax for HY2017 should be $1,515,385, not $1,515,634 as in the report. I understand that the difference is only $249, but I still prefer to receive a report that is mistake-free.

- In the cash flows statement, the column for HY2016 is missing the capital return payment of $1,043,015 that was paid in the HY2016 period. The total is correct though.

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As a long-term investor of ASW, this kind of sloppiness raises my concerns a little bit. ASW usually is quite prompt in releasing its reports. For half year reports, ASW usually releases it by mid February. This time, they waited until the very last day of February before releasing it. This combined with the minor mistakes in the report, makes me wonder what's happening over there over the nullarbor.

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Apart from that, the result itself is quite pleasing to read. Another steady as she goes kind of result.

Back in 2008 when ASW first listed, as part of the listing, it acquired a client list from the founder's business. This client list is being amortised over 10 years. As of the end of HY2017, there is only 1 year remaining. What this means is by this time next year, ASW will stop amortising $100,100 every 6 months. In other words, starting from the second half of FY2018, ASW's annual profitability will increase by $200,200.

As we know, this kind of accounting gimmicks don't affect the cash flows at all, all it does is, all things being equal, it will make ASW look less expensive, as the P/E will decrease slightly.

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@travelightor,

Whenever I reconcile my financial model to financial statements I make a habit of also checking pcp figures in order to pick up inconsistencies or re-statements, so I did pick up the missing capital return number, but I figured that it must be a template thing, and was excluded because the reporting template for the DH2016 didn't have a matching entry.

Yes, it reflects a lack of proper proofreading, but I think can understand how it happened.

As for the missing $249 (actually quite funny you picked it up, in the scheme of things), I didn't notice that,my excuse being that I take the reckless liberty of rounding to the nearest $1,000(!!)

Whenever I see an ASW result, I always chuckle to myself at the notion of a publicly-listed company - valued at tens of millions of dollars and generating Revenues and Profits measured in several millions of dollars - presenting its financial statements in figures to single dollar accuracy.

ASW Price at posting: 86.0¢ Sentiment: Buy Disclosure: Held
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