In a statement to the ASX, Cellnet declared the loss included a “substantial provision” for doubtful debts of $3.1 million which although not classified as a prior period adjustment in terms of Australian equivalents to international financial reporting standards requirements, relates to periods prior to the current reporting period.
“This provision has been necessary as an extensive review identified weaknesses in internal controls and processes over financial reporting in prior periods,” stated Cellnet chairman Alexander Beard.
However Beard stated, excluding the doubtful debts provision of $3.1 million mentioned above, the underlying earnings showed a net profit of $1.8 million for the group. As the comparable results from 2006 contained a one-off profit of $2 million from the sale of a New Zealand property, the comparable results from operations were $695 000.
“The six months has been a tough period with significant effort expanded in addressing deficiencies in internal controls and in restoring confidence and credibility to Cellnet’s offerings. With the return of Stephen Harris as managing director and other key changes to the senior management team Cellnet has made significant steps in restoring its market position,” stated beard.
According to Beard, the next six months will see a significant focus on operational efficiencies, release of working capital and earning accretive growth, but at this stage no guidance can be given as to the expected full year results.
Cellnet makes net profit of $1.8M
By Lilia Guan on Mar 3, 2008 7:07AM