Snowball profits on ice

SnowballGroup is close to meeting its promise to shareholders of arresting its losses by signalling it will post a moderate operating profit for the final quarter of the 2004 financial year.

The group has reeled in $146,000 earnings before interest, tax, depreciation and amortisation (EBITDA) loss for the first half of the 2003/04 financial year, but its performance in the second half — to be announced in coming weeks — is unlikely to push the firm into the black.

However, the result will be a significant improvement on its previous net losses for both the 2001/02 and 2002/03 financial years, which were negative $6.16 million and negative $3.45 million respectively.

Filing a commitments test entity fourth quarter report with the Australian StockExchange, Snowball says in the September 2004 quarter, it will make staff-related payments in respect to the 2003/04 financial year and that stakeholders should therefore expect negative cash flows over the next three months.

However, given a stable operating environment, the group expects to markedly improve operating performance and cash flows during the 2004/05 financial year.

“We continue to establish a sound financial foundation for the pursuit of our growth objectives,” the group says.

Receipts from customers for the financial year to June 30 were up 19 per cent compared to the previous year. The group also recorded a moderate 5 per cent increase in payments for staff and other costs over the same period, resulting in a $790,000 improvement in operating cash flows.