It is wonderful to see Peter Cook spruiking BTA with supposedly independent analyst report.
ABN AMRO Predictions for 2008/2009: Revenue of $63.8m ($43.8 m after stripping off the abnormal $20 m cooked GSK settlement) In simple language ABN predicts revenue will increase from 41.7 m (2007/2008) to 43.8m
EBIT: $9.9m
KNOWN FACTS (from recently announced 1H Account): Total revenues were $33,561 (2007: $30,370). After stripping off the abnormal $20m the 1H revenues were $13.561m - a reduction of 45% from (2007: $30.370)
Put simply ABN predicted the 2H revenue ($30.239m) will be almost 3X of the $11.3m in the 2H of the last FY.
LET US PUT THIS PREDICTION TO THE TEST: The bulk of BTA revenue is mainly made up from Relenza Royalties and “Collaboration Revenue”
BTA announcements for the 1H: “Royalty income from sales of Relenza was $3,819 (2007: $16,483)”.DOWN 77% “Collaboration income was $6,657 (2007: $9,560)” DOWN 30.4%
On Relenza royalties, before 6 Feb ABN stated:QUOTE "The release of the 4Q Relenza sales from GSK is due on 6 Feb. 2Q and 3Q results were disappointing, although 4Q is SEASONALLY STRONGER. Relenza royalties are difficult to predict, however we are EXPECTING A SOLID IMPROVEMENT on the GBP 12m achieved for 3Q". Solid improvement??
The collaboration income included the shocking “Milestone payments of $NIL (2007: $3,419)” DESPITE R&D + Product development expenses increasing 17% from $10.584m to $12.361m. INCREASED EXPENSE = NO MILESTONE ACHIEVED = INCREASED EXECUTIVE REMUNERATIONS!!! “Cut & Paste” Facts : “Research and development expenses were $6,339 (2007: $4,656) reflect the development on partnered and other projects. • Product development expenses were $6,022 (2007: $5,928), consistent with the advancement of our clinical programs, particularly HRV, LANI and RSV”
IS THE 1H RESULTS REFLECTIVE OF THE 2H? “corporatefile.com.au: Excluding the $20 million GlaxoSmithKline (GSK) litigation settlement, the underlying business booked a net loss of $12.8 million for the half versus net profit of $5.5 million previously. Is the underlying result indicative of the earnings trend going forward? CEO Peter Cook :As we have high expenses in some halves and low expenses in others, and vice versa, our earnings can seem quite volatile on a half-yearly comparative basis. It would be inappropriate to extrapolate too much from any one half’s result and see that as establishing a trend. It’s simply the nature of our business”.
Cook’s catchcry is repeated in the analysts reports is Quoting ABN “The timing of royalty revenue is difficult to predict, so we make no changes to our forecasts”
IF you believe Cook then you can believe ABN’s wonderful predictions.
I let the above “Cut & Paste” FACTS speak for themselves.
BTA Price at posting:
44.0¢ Sentiment: Sell Disclosure: Not Held
