IMH imt holdings limited

for nmbin

  1. 3,176 Posts.
    IMT HOLDINGS LIMITED 2002-11-05 ASX-SIGNAL-G

    HOMEX - Sydney

    +++++++++++++++++++++++++
    RESPONSE TO ASX QUERY

    I refer to your letter dated 1 November 2002 requiring the Company to
    respond to eight queries raised in that letter.

    The response to each of the queries raised by the ASX in that letter
    are provided below. IMT notes that the ASX letter as well as this
    response will be released to the market.

    1. RESPONSE TO ASX QUESTION 1

    The Company's ability to fund its activities in the next two quarters
    and beyond cannot be evaluated by reference to the Appendix 4C
    numbers alone.

    Expenditure in the quarter included a significant quantum of
    non-recurring and prior period costs most of which were as detailed
    in the Company's Prospectus.

    * Research and Development expenditure of $205,000 was incurred in
    the quarter. Forward Quarterly commitments for Research and
    Development are expected to be less than $20,000.

    * Payments for prior period Creditors of $243,000 were made in the
    quarter.

    The quarter's operating expenditures therefore included $428,000 of
    non recurring costs.

    Debtors outstanding at the end of the quarter included an amount of
    $158,000 with an ageing of greater than 60 days. Focus on listing
    activities during this period together with processinq delays from
    one major customer resulted in reduced collections during the
    quarter. Improved collection procedures have bean established which
    the Company believes will significantly reduce the level of aged
    debt.

    The combined impact of additional expenditures and reduced
    collections generated abnormal operating cash flows for the quarter
    of $586,000. IMT believes that implementation of current businessobjectives will result in a positive operating cash outcome during
    the first quarter of 2003.

    Investing expenditures of $84,000 were incurred in the quarter to
    fund new capital expenditure on plant and equipment and mine
    development costs. The Company intends to fund future capital
    expenditure from recently established external finance lines.

    2. RESPONSE TO ASX QUESTION 2

    The Company does not expect similar negative cash flows to be
    incurred in the future. Non-recurring cash outflows of $428,000,
    increased debtor collections and actions to increase revenue are
    expected to return the Company to positive cash flow in future
    quarters.

    3. RESPONSE TO ASX QUESTION 3

    Sales revenues were below expectations in the quarter with a slower
    than anticipated offtake of new generic Coles / Bi Lo cat litter
    product and delays in production or new industrial grade bentonite
    products. This shortfall should be partially recovered in the next
    quarter with the commencement of industrial grade bentonite sales.

    Expenses were in line with expectations.

    4. RESPONSE TO ASX QUESTION 4

    Revenue was recognised to be below expectations in July with steps
    taken immediately to redress the situation. This resulted in an
    increase in average sales levels in July and August. The
    circumstances for the reduction in revenue included:

    (a) CAT LITTER

    Runout of existing Coles / Bi Lo Generic stocks occurred at a slower
    than anticipated rate thus reducing the offtake of new Company
    product.

    (b) NEW PRODUCTS
    Industrial product sales are subject to successful completion of
    product trials. The Company anticipated trial completion and initial
    orders before the end of the quarter. Delays in the procurement of
    equipment and the testing of product have delayed sales to the
    current quarter.

    5. RESPONSE TO ASX QUESTION 5

    During the quarter, new plant including a mill and ancillary
    equipment were installed to produce products for the foundry and
    drilling markets. This has already had an effect on sales as orders
    have been received from new customers for these products. A major
    sales push has been made for new customers in the cat litter and
    engineering markets, which has generated new orders. There has been
    no change to the Company's business objectives or strategies.

    6. RESPONSE TO ASX QUESTION 6

    The Board of the Company confirms that the Company is in compliance
    with the Listing Rules.

    7. RESPONSE TO ASX QUESTION 7

    There is no change in IMT's strategy as set out in its recent
    prospectus and as advised in its subsequent disclosures to the ASX.

    IMT has substantial sales revenue from the operation of its mining
    resource. At current operating levels, that division of the Company
    is cash positive. With additional orders and new customers being
    obtained over this last month, the mine is expected to provide a very
    satisfactory return.
    IMT have informed the ASX of the development of its Phoslock
    commercialisation activities. All of those activities continue to be
    "on track". IMT remains confident that the tests at Lake Dianchi will
    be successful and that commercial application will commence in the
    near future, thus resulting in revenues being derived at that time.
    Given that IMT will receive royalties with relatively little expense
    to be incurred, the overall operating results of IMT should show a
    substantial profit.

    Achievement of these results will see the Company with a very strong
    balance sheet. IMT will be in a position where it could pay dividends
    to shareholders in the current or subsequent years, should the
    directors so choose.

    Apart from lease liabilities in respect of plant utilised at the mine
    site, the Company will have no interest bearing debt.

    Potential investors have met with IMT and have expressed their
    willingness to subscribe for new shares in IMT at not less than the
    price in the recent prospectus should the Company decide it requires
    further capital. Accordingly, IMT believes it has access to further
    funds if there was a need.

    8. RESPONSE TO ASX QUESTION 8

    Breakdown of Working Capital Payments follows:

    CATEGORY OF PAYMENT $(000's)

    Creditors - General 266
    Creditors - Transport 271
    Creditors Packaging 92
    Creditors - Contract processing 100
    Creditors - Equipment Hire 40
    Rent 57
    Other 26

    TOTAL 852

    N Traill
    COMPANY SECRETARY

    regards gaga

 
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