ASC 6.67% 1.6¢ limited article

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    Here is an article from today's West Australian:

    AdultShop cock-a-hoop over porn cash

    By Fran Spencer

    ONLINE porn broker is riding high on the success of its venture into hard-core adult Internet sites, with the cash registers ringing to the tune of almost $32.5 million for the March quarter.

    The surge in revenue, up $9.7 million from the December quarter, helped push the Perth company to a net positive operating cash flow of $5.8 million for the three months to March 31 - and, with $11.9 million now in the bank, AdultShop said yesterday it was ready to look at acquisitions and "internal growth opportunities".

    The net cash flow for the quarter was $5.2 million, up from $4.5 million in the December quarter and an impressive turnaround from the March 2001 quarter's figure - a negative cash flow of $3 million.

    The company said the increased cash flow was due to the successful implementation of "various growth opportunities" in the online entertainment business and a general improvement in business trading conditions across the whole AdultShop group.

    The acquisition of online entertainment business Today's Success in June last year has provided a huge lift for AdultShop's finances, with the Internet porn sites attracting huge volumes of paying traffic.

    Last month, AdultShop posted a modest half year profit of $272,000 - a result chief executive Malcolm Day attributed largely to the "significant" revenues collected from the Today's Success business.

    At the time, Mr Day said the adult sites attracted between 50 million and 60 million visitors a month. Active member subscriptions to Today's Success had climbed from 27,000 at the time of the acquisition to 215,000 at December 31.

    AdultShop did not reveal the amount contributed by the Today's Success arm to the March quarter revenues, but indicated it had again been substantial.

    Mr Day could not be contacted for comment yesterday.

    "The third consecutive quarter of increasing positive operating cash flows has reinforced the success of the sales initiatives applied in the online entertainment division," the company said.

    "The directors . . . expect the strong positive cash flows generated by Today's Success to continue in the coming quarters."

    The robust cash flow left AdultShop with $11.9 million in its war chest at March 31. Mr Day said last month the company's aim was to increase cash reserves "as much as possible" by June 30 before going on the hunt for acquisitions in the second half of the year.

    AdultShop shares yesterday firmed 1¢ to 22¢.

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