The inventory change related to the one-off method change in valuation of inventory rather than an actual increase in stock (Though I'm not sure where you get the $11.8m as it doesn't seem like a directly comparable figure with the $1.7m of current inventory in FY06)
From my observations, they are probably holding more high quality pearls for matching. Selling in matched pairs for earrings, or (way more challenging/valuable) matched strands adds quite a bit of value.
I don't like the method change in the valuation of inventories and oysters as it seems to me that they can declare themselves profitable simply by growing pearls without actually having to sell them - well that's a bit extreme, but the gist of it. Then again, property trusts have been declaring a profit based solely on increasing asset values rather than actual earned profits for many years.
Just changed my sentiment to "hold"
ATP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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