ADA 4.40% 47.5¢ adacel technologies limited

Full year results meet forecasts ? no surprises

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    I've just has a quick look at the full year results and noted the following points:
    1) Net cash balance of $4.37m is much better than expected (Macquarie had forecast net cash of only 500k). ADA is solidly cash flow positive.
    2) Revenue up 30% as expected.
    3) Larger than expected loss is only due to the fact that ADA decided not to bring to account $4m of net tax benefits which it could have recognised this period. This $4m will significantly pump up fiscal 2003's full year profit. Thus the $11.8m 2002 loss could have been reported as the forecast $7m loss if ADA had decided to realise its tax benefits.
    4) $11.8m loss due entirely to the expensing of $12.5m of one-off major items.
    5) Confirmation of profitable outlook. ADA will return to profitability in a big way in the second half of 2003 when the revenues from recent North American contract wins start flowing in. In an earlier media release the company had said that, on the basis of contracts already won, group revenue is expected to double in 2003. Thus the reported 2002 revenue of $71.5m could reasonably be expected to grow to around $145-$150m for 2003. Conservative analyst 2003 profit forecast stands at around $6m. Add in the $4m tax benifit and we are looking at 2003 NPAT of around $10m !!! (This figure could be even higher if more contracts are won in the next few months.) ADA share price is going to surge over the next 12 months.
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