revenues double in the quarterly, page-3

I had some concerns when I saw the revenues in the 4C and checked it against the sales figures in the recent shareholder presenation, so e-mailed Ken KcKinnon, the CFO. His reply is as follows:

Cash Flow v. Production Revenue.

The cash flows from Component Homes are not synchronised with sales or production revenues. We receive deposit and progress payments for each home sold. The cash recieved is recorded as unearned revenue(balance sheet liability) until the work is performed when the cash is recognised as production revenue in the P&L Hence the 4C reports cash flows received from clients, not sales contracts secured nor production completed.

Sales v. production revenues.

The terminology used in the presentation refers to contracts entered into with clients(sales). Component Homes have "sold" homes that are to be manufactured over several months. The production revenues will be recognised as the work is completed.

"I understand the timing of sales contracts, production and cash flow may be difficult to to fathom from outside operations. However, the overall point is that sales of Component Homes are growing, production is increasing and operating cashflows are now positive for the first time in the company's history."

Don't know whether I was the only one confused, but all in all a good result. With domestic sales, production and cash flow all increasing, Component Homes cash flow positive for the first time in its history, the door JVs coming on stream and Jordan looking positive for home manufacturing, and still only a market cap of $11 million at 15 cps, the future looks much more promising than I thought.