Shares in AdultShop.com ran rampant yesterday after the company unveiled a set of bullish profit forecasts that, if achieved, will prove the old adage that "sex sells".
AdultShop said yesterday it expected more than $118 million of revenues to have flowed through its cash register by the end of this financial year.
Shares in the Perth-based business rocketed 50 per cent on the news as the former mining company dazzled investors with additional promises of $106 million in revenue for just the first half of next financial year, and a possible dividend over the next eight months.
AdultShop.com shares eventually ended yesterday 11.5 cents up at 34.5, and were the most traded stock on the market for the day.
The company said its sprawling empire of sex toys and adult entertainment, which encompasses online activities, traditional mail order, wholesale sales and bricks-and-mortar shops, would notch up a net profit of $5.6 million for the 2001-02 financial year.
AdultShop.com chief executive Malcolm Day said the company's online division, Today's Success, had driven the bottom line, with its majority United States customer base delivering a stream of sales in US dollars.
Mr Day said that with AdultShop.com's cash balance tipped to swell to $17.4 million by June, and hitting $30.3 million by the end of calendar 2002, a dividend was a definite possibility.
The good times for AdultShop are predicted to roll well into 2003, with the company expecting a net profit for the six-month period to December 31 of $11.6 million.
"We fully expect to maintain and even accelerate the momentum of our projected revenue growth and profitability in the future," Mr Day said, adding that the company was keen to make more acquisitions. "Once our cash reserves have reached set benchmarks, we will once again actively pursue potential acquisition opportunities."
Floated on the Australian Stock Exchange during the dot-com boom in 1999, Adultshop.com has rapidly expanded from its original strategy to supply adult products over the Internet.
The company has a string of retail shops in Australia, overseas operations in Germany and the US, and a number of phone services.
Mr Day said the increased uptake of high-speed Internet connections would help the company attract more customers to Today's Success and offer an expanded suite of products.
AdultShop.com had sealed a number of lucrative online advertising contracts during the first half of 2001-02, which had started to flow through to the bottom line this year.
AdultShop recorded its maiden profit last year with a $272,000 after-tax profit for the six months to December 2001.
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