Well, considering EFTel has invested in a large network rollout I think it is expected that there would be an increase in liabilities. Based on the notes on page 19 of the annual report, it looks like EFTel is attempting to fund the network through cashflow, and, if it cannot do that get a loan to move it into a non-current liability or, raise capital and remove the liability.
As far as I can see the company is cashflow positive - so I don't see what problem there is.
The investor presentation a while back highlighted wholesale opportunity. It also said there was an expectation of connecting 30,000 new services by October 2009. Based on the cost base indicated in the graph($17-$18 hard to tell), 30,000 services at an average of $10 less per month compared to the Telstra services is $3,000,000 on to the bottom line.
Also, there was another asx announcement about the purchase of the Concept Group. That indicated there was some type of off-shoring arrangement. The annual report indicated there was around 6.8mill in employee expenses. If EFTel moved a ton of jobs off-shore, then, purely based on that, they could save millions.
EFT Price at posting:
4.7¢ Sentiment: None Disclosure: Not Held
