By NZPA
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Wednesday 4th September 2002 |
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The ASX queried the company about several large writedowns which pushed its annual result well into the red.
Baycorp's loss for the June year of $A299.9 million ($NZ356.4 million) included a writedown of goodwill on consolidation ($A228 million) and writedown of its New Zealand databases ($A65.6 million).
Baycorp shares, which have lost 10 percent of their value since Friday and were trading above $7 in December, were down 15c today at $3.80 albeit on very light volume.
Sam Macdonald of broker DF Mainland said Baycorp had been punished by Australian investors because of its result.
"I'd say Baycorp's in for another rough day. People, particularly Australian investors, are not responding well at all to these writedowns," Mr Macdonald said.
"The market's been a bit ruthless and it will continue to be ruthless with that one."
The loss compared with a profit on paper of $A18.78 million the previous year.
"The expectation of the restructuring and integration costs and goodwill amortisation was disclosed in the merger information memorandum provided to all shareholders," the company said in its response.
The board discussed the writedowns on August 29, and made its decision on September 2 before the results were released.
Baycorp Advantage was created through the merger in December of New Zealand's Baycorp Holdings and Australian associate Data Advantage.
"Profit from ordinary activities before tax, excluding the above significant items, prior year adjustments and amortisation of goodwill was well in excess of the corresponding period."
Revenues rose 60 percent to $A122.4 million, while net operating cash flows were up 23 percent on the previous year.
Baycorp managing director Keith McLaughlin said on Monday that synergy benefits -- identified at the time of the merger of $A15 million a year within three years -- were on track to being achieved. The merger was 90 percent completed, he said.
David Roberton of UBS Warburg in Sydney said the writedowns were irrelevant and the company had met expectations on a pre-abnormals basis.
"The reality is that if you want to look at what both companies did historically, Baycorp had reasonably aggressive accounting methodology. We believe this result was a complete turnaround to very clean accounting," Mr Roberton told NZPA.
"More people have been concerned that the growth is going to be held up by debt acquisition, rather than from their core business information areas.
"The company has stated previously that they will cap (debt acquisition) at 20 percent of revenues, and it's currently 8 percent."
Baycorp's most recent expansion into debt acquisition was its win in July of a three year contract to provide debt recovery services for Australia's biggest telco, Telstra.
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