12.10.2002
BATTERED AdultShop.com shareholders were left bracing themselves for further turbulence yesterday after the troubled online porn broker revealed the accuracy of both its reported June 30 full year results and its December half forecast had been called into question.
AdultShop chairman Kim Heitman asked the Australian Stock Exchange to suspend trade in the company's shares yesterday morning, about three hours after the market opened.
"The company has become aware of information which affects the revised financial projections issued to the market on 5 September, 2002 . . . as well as the financial report for the year ended 30 June, 2002," the request said.
Mr Heitman said the company expected to make an announcement before the opening bell on Tuesday.
The warning was a further blow to AdultShop shareholders, who have endured a rollercoaster ride over the past five weeks as the value of their investment was slashed by up to 75 per cent.
Before yesterday's announcement, AdultShop shares opened at 7¢ and were at 7.1¢ when trade was suspended.
On September 5, the Perth-based company issued a statement backing away from a bullish forecast profit for the December half of $11.6 million, instead projecting a loss as well as a fall in its cash reserves.
The shock announcement saw the company's shares plunge from 23.5¢ to 10¢ the next day, as the exchange launched an investigation into the circumstances surrounding the downturn in its online porn operations.
In the days that followed, AdultShop's share price slumped as low as 6.5¢ as the investigation was referred to the Australian Securities & Investments Commission. The company took a further hit when it was revealed it had paid a total of $1.6 million to AdultShop chief executive Malcolm Day's girlfriend, Bree Maddox, for directing internet traffic to the AdultShop site.
Confirmation of the payments to Ms Maddox, in response to questions from The West Australian, came just 12 hours after AdultShop's long-standing non-executive chairman Reg Gillard quit the board. Another director, Samantha Tough, also resigned soon after.
Less than three weeks ago, AdultShop told the market it stood by its September 5 forecast that it would have between $10 million and $12 million cash in its coffers by December 31.
In response to a three-page formal query from the exchange, Mr Heitman said he expected positive cash flows for the remainder of the December half, although the company could have negative cash flow for September.
But yesterday, that forecast - along with a reported full year profit of $5.7 million and cash reserves of $17.4 million at June 30 - appeared to be in doubt and The West Australian was unable to obtain any further information from the company.
In response to an emailed list of questions from The West Australian, AdultShop investor relations manager Nancy Hackett said no one from the company was available for comment.
"As stated in (yesterday's) request for a trading halt, AdultShop.com expects to make an announcement on Tuesday, so I can only refer you to that," she said in an emailed statement.
Cash flow's a positive for AdultShop.com
Oct 17
AdultShop.com, the embattled erotic entertainment group, has clawed its way back to being cash-flow positive but stopped short of declaring an end to its turmoil.
As part of strict reporting requirements forced upon it by the Australian Stock Exchange, AdultShop produced its monthly cash-flow statement for September yesterday.
This showed receipts income of $10.7 million and a net operating cash inflow of $2.6 million.
The figures arrest a $6.1 million operating cash outflow for the months of July and August as the Perth company's paying membership base fell by more than half.
AdultShop did not provide commentary to yesterday's results, and managing director Malcolm Day would not respond to questions about the company's financial outlook.
AdultShop's senior management and directors are completing their second revision of the company's December-half financial forecast.
AdultShop said early last month that a decision to outsource the membership billings process had caused its membership base to be slashed by 60 per cent to 115,000, prompting its interim profit forecast to be cut from $11.6 million to a likely loss.
It is unclear whether the subsequently strong September performance is sustainable and what impact it will have on AdultShop's expectation of an interim loss.
AdultShop would need to maintain a cash-flow neutral position for the next 10 weeks until December 31 to adhere to its balance-date cash reserves target of $10 million to $12 million.
The company's shares remained suspended yesterday while it finalised the December-half projections.
After attracting the ire of the Australian Stock Exchange last month, AdultShop has said privately that it wants to ensure there is no doubt the market is fully informed before it asks for the suspension of its shares, a favourite with day traders, to be lifted.
The Australian Securities and Investments Commission, which launched an investigation after the stock exchange referred its concerns, is still working through reams of AdultShop financial statements, which it demanded from the company last month.
ASIC will not comment on the investigation but it is believed the regulator is yet to take action.
|
Thread abonnieren
