By Nick Stride
Friday 14th June 2002 |
Text too small? |
Alan Robb |
Their problem is with the presentation of the company's financial results for the year ended March 2002.
These show revenue of $89.17 million, earnings before interest and tax (ebit) of $3.71 million and a bottom-line profit of $3.81 million.
But footnotes to the prospectus table show those figures include a $2.43 million gain on the sale and leaseback of land and buildings.
Included in the ebit and net profit figures are a $2.15 million gain on revaluation of intangible assets and plant and equipment, and $2.08 million of restructuring costs.
Alan Robb, a senior lecturer in accountancy at the University of Canterbury, said the presentation of results "is poor and likely to mislead."
All three one-off items should have been disclosed in the statement of financial performance, not as footnotes, Mr Robb said.
"There is a line in that table headed 'extraordinary items' which contains no figures at all. This suggests there were no unusual items but that's patently untrue when one reads notes 2 and 3," he said.
A sharebroking analyst, who declined to be named, agreed, saying that, adjusted for one-offs, Vertex's "core" ongoing earnings for 2002 were only $1.31 million.
"That means the 2003 forecasts are for ebit growth of 65% and net earnings growth of 342% on revenue growth of just 4%. How credible is that?"
Mr Robb said, when one-offs were taken into account, the expectation that earnings would grow to the forecast 2003 figures was questionable.
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