| Subject: Re:Balance sheet work so far----Erg. |
Author:
Steve Bonkers.
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Date Posted: 13:25:06 01/27/02 Sun
In reply to:
Steve Bonkers
's message, "Re: Use this for some balance sheet work----info Stockhouse." on 03:46:46 01/24/02 Thu
Profit from sale of EDI Downer shares equals------15 to 18 million
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Net asset backing is 39c. (J.B.Were give it as higher) (almost 25% higher than 37c--48c) (DCO valuation 49c)(no one has stated the figure on the BB only to say that it is almost 25% higher than 37c
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$31 mill is recurring revenue deffered but not disallowed---phone call to investor relations (Sean Duffy) fee relates to licensing of technology to the German consortium Cards ERG received a percentage of the consortium, it is not publically listed but private, audtors are unsure how to value Cards.
Shareholders letter.
"The final treatment adopted by ERG in respect of a licence fee to the German business card.etc AG was to not recognise the value of that fee at June 2001. Following discussions with our auditors, their view was that the business plan of card.etc was not sufficiently advanced to be able to form an opinion as to the value of the licence fee due to ERG of $31 million."
Since closing out the June 2001 year-end, card.etc has been awarded Germanyˇ¦s first large-scale transit smart card project to supply smart card solutions to the Rhein-Ruhr region in Germany. This is anticipated to result ultimately in some 7 million smart cards being issued, which, in turn, represents approximately 35% of the smart card issuance envisaged in the card.etc business plan within Germany.
http://www.stockhouse.com/bullboards/viewmessage.asp?no=4625281&tableid=1
From Ebet thread.Killjoy68--"They weren't treated as abnormals because EBT had incurred expenses in setting up the deals and therefore they treated the payments as revenue even though they were one offs. It is a while since I did accounting but I would have treated them as abnormals, but I guess thats why I am no longer an accountant."
I would think in Erg's case the entity has incurred expenses setting up Germany.
http://www.erg.com.au/invst_relations/reports/index.htm
ERG today announced a profit of $6.1 million on revenue of $299 million for the year ended 30 June 2001 and positive operating cash flow of $18.8 million compared to $11.8 million negative in 2000.
Whilst accepting that the transaction was completed during the year, they are not willing to accept for audit purposes that the consideration receivable is sufficiently measurable or that there is sufficient probability that economic benefit will flow. The Directors of ERG disagreed with this view and believe the licence fees should have been included as revenue consistent with the previously adopted practice. Had that occurred, as was expected by the Board, the revenue would have been approximately $331 million and pre tax profit $37.5 million.
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ERGˇ¦s debt to equity ratio, including the Listed Convertible Notes, improves from 110% as at 30 June 2001 to 80% based on the proforma position, with the Rights Issue and Proton World acquisition taken into account.
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23 Aug 2001, 4:19 AM CST
Some 80 million Australian dollars ($42.63 million) in fees from a Rome smart card project has been deferred to next year. Reported By Newsbytes.com, http://www.newsbytes.com .
none of the Rome revenue (approximately $80 million) was brought to account during the year; and the impact of the change in accounting treatment of the licence fee. http://www.erg.com.au/invst_relations/reports/index.htm
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Total so far----80 plus 31 equals 111 million net profit with the 31 million included Peter Fogarty states would have been
37.5 million instead of 6.1--at the last profit report. Surely you must add the 80 million from Rome as well? (for it was deffered as well) the 80 million is revenue not straight out profit---but if 31 million impacts things to such an extent that profit would have been 37.5 as opposed to 6.1---why would you not say the same thing with the 80 million?
If so and expenses remain fairly constant--the net profit becomes for the half year half of 6.1--equalling 3.05 plus 31 plus 80 =
114.5 million (growth is 150% have just left it flat to be conservative) add abnormal gain from sale of Edi Downer taking lower of Wrongways figures of 15 million = 129.5 million-excluding Rome altogether and just including the 31 million a net profit including abnormals of 49.05 million (for the half year not the full year) all up 200 million worth of revenue is expected to come in the 80 million from Rome is only part of that.
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Any comments on the above Walt? Have I done something wrong with the figures? It looks good to me, there are now three times as many shares on issue, but then the dilutionary impact of that was offset by acquiring an asset--ie Proton.
Your thoughts if you happen to read would be appreciated.
Cheers,--BK.
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