re: Ann: Trading Update and Appointment to Bo... Cash at bank...

re: Ann: Trading Update and Appointment to Bo... Cash at bank was $1.6m as at 30 June 2008 according to the statuatory accounts, so it's increased by $400k in 6 months. They're no longer paying the CEO (about $400k p.a. => $200k saving over six months) and they downshifted to cheaper auditors, and cheaper offices, and got rid of the London listing costs whatever they amounted to. There was undoubtably far more substantial cost-cutting action udertaken because the big news is that, over that six month period they've managed to keep afloat without going to the market for more money. Going from losing millions year-on-year and being kept alive with regular capital injections to making what looks to be a smallish profit without a capital injection could be considered something of an achievement. There are no indications of imminent new revenue streams (no recent sales announcements) and so what we seem to be seeing here is a company being stripped back to the point where it will make a profit on the annual maintenance fees but perhaps with a reduced sales budget and a lousy climate for their main target markets (Europe/UK and North America). If they manage to keep this up we may at least be able to get a fundamentals-based estimate of the value of the company. If they can maintain, e.g., $400k per half year in profit, then, aside from good will for new sales, or further sales to existing clients, we might be looking at a valuation of 8 * 0.8 = $6.4m, which is coincidently what the current share price of around $0.023 gives. Add in some good will and we could be looking at perhaps a few more million. Hence, on this weak signal maybe it's worthwhile having a shot. However, it remains to be seen whether these cost-cuts are a one-off or lead to sustainable fundamental profitability.