Granted this company is showing some phenomenol growth rates in...

Granted this company is showing some phenomenol growth rates in revenue but the question that needs to be answered over the longer term is when is this going to start falling through to the bottom line? Despite a more than 200% increase in revenue in FY06 the company reported a loss of $6.6m as opposed to a loss of $5.6m in FY05.

Also management talks a lot about growth in client numbers and revenue yet at no point that I have read do they address profitability. Granted they are in a phase of rapid growth but sooner or later they have to get out of the red. Cash outflow in FY05 of $6.3m increased to an outflow of $8.2m in FY06. At the rate they are currently burning cash they will have to go to market before year end or borrow (FY06 cash balance of $5.7m). At the rate they are groeing revenues they are definitely worth keeping an eye on however I will be keeoing on the sidelines until I can see some improvement in profitability and cash flow before jumping in.