It's all well and good that Janison are shooting the lights out with higher revenue but I'm concerned that there's a buildup in Accrued Revenue, which is not good for cashflow.
Emailed Janison's CFO two days ago and his response wasn't very encouraging:
"Accrued Revenue (otherwise known as 'Unbilled Revenue') fluctuates from time to time based on the timing difference between when revenue is recognised and when customers are invoiced.
Customers are invoiced according to contractual milestones and agreed terms whereas Revenue is recognised based on the percentage of completion for each project.
For instance, if a customer's project is nearing the end of the build phase but it has been agreed that the customer will pay following completion then the Accrued Revenue in this instance will be high. Alternatively if a client is invoiced in advance of a project commencing, revenue and accrued revenue will both be zero and the Income in Advance liability account on the balance sheet will show a balance (Accrued Revenue does not go into a negative balance).
Janison has different contractual invoicing arrangements based on a variety of factors. These different arrangements, combined with the stage of completion for each project currently in progress will result in movements in the Accrued Revenue account.
I hope this clarifies the issue. Please feel free to reach out if you need any further assistance."
In summary, Janison will continue to report negative op cash quarterlies until they complete their projects. I really liked this company up until I read between the lines and noticed the increase in Accrued Revenue.
JAN Price at posting:
31.5¢ Sentiment: Sell Disclosure: Not Held
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