The only news I've seen was yesterday's response to an ASX...

The only news I've seen was yesterday's response to an ASX profit figure and price query, which basically said that nothing material has happened and it anticipates no change to dividend payouts.

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We refer to your letter of 28 February 2008 and respond as follows:
1. When did the Company first become aware that its
result for the half-year ended 31 December 2007 would
be likely to vary by 15% or more from the previous
corresponding period (the ‘Information’)?
CP1 Limited (Company) is a property development company.
The treatment of its income and profit is complicated by the
accounting treatment of sales contracts and related activities.
Seasonal factors also impact upon the progress of development
work and the recognition of profits.
The Company’s Audit Committee met on 19 February 2008 and
made certain recommendations to the Board regarding
recognition of sales contracts for the Half Year. The Board
met at a later time on 19 February 2008 to consider the
recommendations and as a consequence the Half Yearly results
were able to be finalised and then immediately announced on
21 February 2008.
2. If the Company became aware of the information prior
to the release of the Appendix 4D, please identify any
earlier announcement from the Company which
disclosed that result for the half year ended 31
December 2007 would be significantly different from
the previous corresponding year.
No announcement relevant to the Half Year ended 31
December 2007 was made before 21 February 2008.
3. Does the Company consider that the information
concerning the result for the half-year ended 31
December 2007 was material to the Company?
No.
4. If the answer to question 3 is ‘no’, please advise the
basis on which the Company does not consider the
information concerning the result for the half year ended 31
December 2007 to be material.
Because of the cyclical nature of the operations of the Company, the
profits of the Company are heavily dependent on the recognition of
sales within a particular reporting period. The Board:
(a) does not consider the financial performance of the Company
over the full financial year ending 30 June 2008 will be
significantly different to the previous year;
(b) anticipates no change in the dividend payments of the Company
for the full financial year ended 30 June 2008 (when compared
with FY 2007); and
(c) does not and has not provided profit guidance for the half year
(see page 10 of the Shareholder Presentation 8 October 2007).
The Board is aware of the requirements of Chapter 19, Listing Rule
3.1A and Guidance Note. 8.
In applying these obligations the Board remains of the view that whilst
the net profit for the Company (for the half year) increased by a factor
of 616.3% on the previous corresponding period, this change is
meaningless unless considered against the operations of the Company
(given its cyclical operations) for the full financial year.
The test in Listing Rule 3.1 requires the Company when it becomes
aware of any information concerning it that a reasonable person would
expect to have a material effect on the price or value of the Company’s
shares to immediately tell ASX that information. The Company submits
that whilst the Half Yearly results are materially higher (when
compared with the equivalent period last year) a reasonable person
would not expect the information to have a material effect on the price
or value of the Company’s shares.
Detailed below is the historical closing price of the shares of the
Company in the period leading up to and after the profit announcement
on 21 February 2008.
Closing Share Price Date
$0.44 18/2/2008
$0.44 19/2/2008
$0.40 20/2/2008
$0.38 21/2/2008
$0.37 22/2/2008
$0.37 25/2/2008
As you will note there were no material movements in the Company
share price during the period immediately before and after the
announcement.
A reasonable person would not expect the Half Yearly results to have a
material impact upon the price or value of the Company’s shares. The
Company has consistently communicated via announcements to the
market, that reliance should not be placed on Half Yearly results. For
example, the Shareholder Presentation dated 8 October 2007 stated
that ‘half yearly results are not necessarily an appropriate indication of
expected full year results for a property development business which is
impacted by seasonal effects’.
In the event the Directors become aware of information that may have
an impact on the price or value of the Company’s shares including the
annual net profit this information will be immediately disclosed.
5. If there was no earlier announcement, and the Company
became aware of the result for the half year ended 31
December 2007 prior to 21 February 2008, please advise why
the information was not released to the market at an earlier
time. Please comment specifically with respect to listing rule
3.1.
Please refer to our response above.
6. Please confirm that the Company is in compliance with the
listing rules and, in particular, listing rule 3.1.
The Company is in compliance with the listing rules and in particular
listing rule 3.1.
Yours sincerely,
CP1 LIMITED