Cost overruns cause red ink at Cabletalk

Although full year earnings are not due to be released until June the company says latest estimates show it will fall well short of its net earnings prospectus forecast.

While revenues of $46 million are in line with forecasts the company reports that costs of $45 million have exceeded prospectus levels by $4 million.

"This is a consequence of reduced margins in the second half of the year plus overhead levels which, as foreshadowed in the half year report, took much longer to remove."

Earnings before interest, tax, depreciation and amortisation are expected to be positive but non-cash items of $800,000 in depreciation and $660,000 in amortisation are forecast to push the final deficit out to around $1 million.

Cabletalk says the result has been affected by the timing of further overseas opportunities similar to its successful Tuvalu Project. These were anticipated to occur in the 2001/2 financial year and are now timed to come to fruition in the 2002/3 financial year.

The company also notes results for the final quarter, January to March, benefited from lower costs and improving margins and it is expecting future operating performance to improve.

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