Big second half skew
Whilst AAV’s pre-goodwill NPAT of $5.7m for H1 04 may appear disappointing given we are forecasting 2004 pre-goodwill NPAT of $17.5m, we believe there are several valid reasons for the second half being much stronger in 2004:
All three of AAV’s main business units have strong skew towards the second half
o All three of AAV’s main divisions, Post Production, Staging Connections and DVD manufacturing typically have a 40/60 revenue split
o Staging Connections has four major convention centres commencing in the months of Mar-Aug 2004, which will contribute strongly in the second half
o DVD manufacturing will have nine production lines running in the second half, compared with only six in the pcp
o All three main divisions have high levels of fixed costs – resulting in an EBIT split we believe will be close to 30/70
AVV
aav limited
