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eyes up betting and dating

  1. johnnyr

    1,217 Posts.

    AdultShop has eye on bets, dating

    By Fran Spencer

    PERTH-based online porn broker AdultShop.com will cast its net into the realms of online gambling and dating services as the cashed-up company goes on the hunt for acquisitions in the next six months.

    Further expansion of its Today's Success online "adult entertainment" business has kept the cash registers ringing for AdultShop, which yesterday revealed it had collected a hefty $42.3 million in revenue for the three months to June 30.

    The company posted a net operating cash flow of $6.3 million for the quarter, ultimately adding $5.6 million to the coffers to boost its bank balance to $17.5 million.

    The cash-in-hand figure is marginally ahead of AdultShop's own projections, which had forecast reserves of $17.4 million at June 30, and the company yesterday signalled it was ready to pursue both internal and external growth opportunities.

    AdultShop chief executive Malcolm Day said the cash reserves were "not quite" at the undisclosed figure the company had set as a prerequisite for further acquisitions.

    However, it had already identified a number of potential targets.

    "We are exploring other online business opportunities . . . most brokers I spoke to on our Eastern States roadshow said there were only three types of business making money - adult, gambling or financial," he said.

    "We're never going to get into the financial sector . . . things like online dating and your online gambling and sports betting are some of the potential areas we will be focusing on."

    In releasing yesterday's report, Mr Day described the Today's Success business as "central to the performance of the overall AdultShop.com group".

    AdultShop bought the cyber-pornography business in July last year from Queensland internet entrepreneurs Dean Shannon and Ray Jones in a $12 million scrip and cash deal.

    Since folding the business into the AdultShop group the company has seen revenues surge, with four successive cash-flow positive quarters under its belt.

    The ballooning revenue gave rise to bullish profit projections, which saw the company's share price surge when they were issued in May.

    AdultShop has forecast net profit of $5.36 million for the June half and $11.62 million for the December half.

    Mr Day said achieving those benchmarks would still take precedence over any acquisition activity.

    However, he said the company was in the early stages of due diligence on a number of potential acquisitions, both in the domestic market and offshore.

    "First and foremost, we're 100 per cent focused on achieving our projections we issued in May and ensuring we achieve particularly our net profits and forecast cash figures," he said.

    "There are a number of options available to us (to grow the business) . . . one is acquisitions, one is launching a new webmaster program and one is new marketing initiatives. We're exploring all three."

    AdultShop was among the top 10 traded stocks by volume on the market yesterday, with 12.9 million shares worth $4.4 million changing hands. The shares slipped 2¢ to 31¢.

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