preliminary final results, page-3

Bacci,

I don't like the treatment of this topsoil any more than I suspect you do. The normal way of handling a remedial cost would be to hold it in the balance sheet as a liability provision and then if you found something within the company such as this topsoil you would reduce the value of this liability provision.

I went looking for such a provision in the accounts and there isn't one. The amount put aside for remedial work at the quarry is almost non-existent as far as I could see. So treating the topsoil as an asset when you don't appear to have provisioned for the cost of the remedial work seems like schist to me.

Also the completion of that Northern Highway clearly is going to leave a hole in aggregate sales over last year.

On the positive side I went looking for housing start figures after the MD's comment today on better conditions there. The link below gives the Housing Industry Associations housing start forecasts:

housing starts

They show a strong recovery from the start of Calendar 2010 and they are forecast to stay solid over coming years. Since windows are put into houses towards the end of construction I think we can expect that the growth in flat glass usage within the housing industry will start to manifest itself in financial year 10/11 and continue in coming years. There really was a collapse in housing starts in 2008/2009 which appears to be behind us now.

Combine this with recovery in demand for soda ash in the mining industry and I don't think we are going to see a return of the problems they had with soda ash last year.

GPASAS