silver linings

I have had a chance to read through the 4D (interim unaudited results) over the weekend and for me this has strong hints of silver linings. The highpoints for me are:

* Operational Cash Flow for the year was POSITIVE $320K and net cash INCREASED $498K for the year. (I find these cash flows more meaningful than the 4C as these are prepared according to accounting standards rather than the ASX produced "fill-a-form" 4C)

* A look behind the operating loss of $827K (which is a SIGNIFICANT REDUCTION - $12m - from the previous year) shows some sizeable non-cash items in there even at the operations line, for example an increase in "provisions" of $700K. Could it be that this company, if it didn't make money from REAL operations last year, then it went pretty darn close?

* Property, Plant & Equipment are down $1.7m and Intangible assets and goodwill are almost nil, even with the sale of Synergy, this indicates that there is some "balance sheet clean up" going on here.

* The company has negligible commercial debt (equipment leases only it seems) and it seems from the commentary that the ATO debt is being managed.

* Net assets has improved by $17M over the year.

My take on this is that there are silver linings in this report. I suspect that they have taken the uplift from the settlement of the Lehamn's debt (and what a coup that was) to belt through some final clean up of the balance sheet.

With very little left to impair or write off, we can expect to enjoy results from the company which actually reflect the money they earn, less the money they spend to show (hopefully) how much money they made. It would be nice for that to be so....

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These are the ramblings of a misguided fool, so please don't rely on them. Do your own research and reach your own conclusions.