Market happy with RMG improvement

The credit and receivables group has admitted its been a struggle to combine 22 separate businesses into a profitable whole, but says recent figures show the positive impact of the rationalisation process is becoming apparent.

It says March delivered record revenue and profit figures and the quarter ended March produced revenue of A$15.5 million with unaudited earnings before interest, tax, depreciation and amortisation of A$1.3 million.

The Ebitda figure for the quarter compares to A$647,000 for the entire 2000 financial year.

The latest Ebitda figure shows the company may be righting itself after disappointing the market earlier when it didn't live up to revenue and profit expectations.

Last July when the company purchased Credit Solutions Australia it claimed the deal would push its share of the Australian collections market to 25% and that revenue for the year ended June 2001 would exceed A$70 million.

In the second half of last year the company earned A$30.8 million, which means it would have to earn around A$24 million in the June quarter to match the forecast.

While that seems unlikely, the positive trading result for the March quarter could augur well for a lift in the stock's fortunes, and the company says it is now on track to deliver industry competitive margins in the short term.

RMG shares have improved in trading Wednesday morning, up 3.5 cents on Tuesday's close to 23.5 cents.

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