I've just had another look at the annual report. The net profit...

I've just had another look at the annual report. The net profit before tax for the first half was about 1.6m profit. If you subtract the first half's number from the full year's number the picture for the 2nd half becomes clear.

The net profit before tax for the last half of 2010 was a LOSS of 1.8m!

They have hidden this by revaluing the asset value of their property (Net gain on revaluation of land and building) - an adjustement of 2.5m. Plus a couple of other adjustments.

So even if you include the year end Mark to Market adjustment write down of about a million bucks, they still lost money in the second half. And quite a bit of it - almost a million bucks.

I'm pretty dissappointed that this company is still unable to control it's raw materials costs against it's sales revenue. They are still clearly buying raw resources at prices that leave them open to subsequent movements in the spot price of lead/zinc etc. My expectation was that they just got burnt by the GFC. It seems they are just generally not managing their finances well.

Also the mark to market adjustment is something that they should know about in advance, and prepare for.

It is seriously time for action to deal with this financial management problem.

Not sure how long I will hold this ongoing risk of surprises due to mismanagement.