Quick Review Of Analabs Earnings

Just saw that Analabs had reported its earnings last night.

Of course, I am interested in it because I was interested to see how it fared because I had blogged on this company before.

First, here's the past postings:

1. What's The Potential Of Coveright Surfaces To Analabs Resources?


2. Update On Analabs Earnings


3. A Look At Analabs Earnings


4. Analabs

( ps: LOL! I hope I won't be accused of obsessive for making this posting! LOL! )

Flashback.

In the posting # 3, A Look At Analabs Earnings, on March 2010, I stated why I decided to blog on this stock.

• The jump in its q-q earnings has been very impressive this year.
  So why am I posting about this stock?
  Well, I had not been positive on this stock before.

Yes, I had not been positive on the stock before. See Analabs. I was NOT impressed. However, in the corporate world, anything can happen. Really. Bad companies can become good and even good companies can turn bad. Yeah, they call it turnaround. And since it was apparent that Analabs could have a positive turnaround for the better, I thought it was only fair that I blogged on it, yes, to acknowledge and to give credit. ( Yeah, Analabs jumped 13 sen to 1.39 on that morning! )

The next quarter, June 2010, I wrote the following: Update On Analabs Earnings. Let me re paste here what I wrote.

Analabs reported its earnings. It made a net profit of 3.640 million for the quarter, giving it a total earnings of 15.389 million for its fiscal year 2010.

Which is very impressive when one starts comparing it versus what it had achieved the previous year.

But then... on a q-q basis, the earnings was terrible.

Ah yes, yet another interesting issue. Should one look at a y-y comparison or should one look at the q-q comparisons?

On a y-y comparison, its 3.640/15.389 million earnings was very impressive. Last year, Q4, it made only 1.376 million and had a total earnings of 9.373 million for the fiscal year. Bravo.

On a q-q comparison, last quarter, it made 5.639 million. So the 3.640 million is rather a shocker yes? Why such a big decline?

Balance sheet comparisons.

1. Cash. This quarter 9.949 million. Last quarter 11.848 million. Last year 32.272 million.
2. Receivables. This quarter 26.924 million. Last quarter 25.275 million. Last year 7.812 million.
3. Investments in quoted securities. This quarter 14.544 million. Last quarter 14.863 million.

Fast forward present day.

Last night Analabs said it made 3.118 million from a sales revenue if 35.562 million.

I knew it was going to look impressive when compared to previous year, same period but on a q-q basis it was rather weak! Same scenario as in June 2010.



The balance sheet.

Of course the most interesting issue was the healthy cash flow. Cash balances increased by some 4.092 million.

And yeah, Analabs still had its 'investment in quoted securities'. It's worth some 14.786 million and it's property had been revalued to 90 million.

And regarding Coveright? This quarter it only contributed some 2.201 million to Analabs bottom line.

Er... do I have to put my disclaimer. I think I better. People do act rather strangely when it comes to stock markets! LOL!

Disclaimer
1. I am a nobody.
2. I am not responsible for anyone's investments.
3. I am not a sotong. :D
4. I am certainly not an independent investment advisor.
5. Since I am not an in dependant investment advisor, I cannot guarantee that you should lose money.
6. Most important, I find no motivation to talk about stock price movements. Yeah, I do not indulge in guessing what a stock price will or will not do. So please spare me all the chats that you think this stock will go down by so much or this stock will soar by so much.
7. Oh, if you insist, I am obsessive! :P

What's The Potential Of Coveright Surfaces To Analabs Resources?

Received the following comments from grahamsmun in the posting: Update On Analabs Earnings

• Coveright is a superb buy !
  An investment of Rm 32m giving a return in investment of Rm 11m a return of 34% p.a.
  We hard the find such buy giving such a good return.
  On top of this analabs still got Rm 9m cash and Rm 12m of securities with no borrowings !
  Tribute should be given to Analab's management increasing dividend to Rm 0.05 tax exempt also !

Grahamsmun, long time!

Ok, let me say this without twisting and turning. Yes, Coveright Surfaces, and the resin impregnated business does have its potential. No doubt.

However, I reckon I deserve the right to pass judgement because it is still way too early to pass judgement.

But if you would indulge in me, let me share why...

Now Analabs acquisition of Coveright Surfaces is described in this pdf file posted on Bursa website.

Now one of the obvious way to gauge an investment is obviously the return of investment. Yeah, this type of stuff, no need to say for it's common sense. :D

Anyway, what I was interested in is the financial track record of Coveright Surfaces.

Here's my comments on those numbers.

1. It's always about profitability. No profits for Coveright means most likely this would be a poor return of investment for Analabs Resources.

Look at the numbers. The last two fiscal year, 2007 and fy 2008, the earnings are DECLINING, yes?

2. The net assets. Compare 2004 and fy 2008. Why the decline?

I then put these numbers into my worksheet.

What do I see? I see declining profit margins!

Am I impressed? Are you?

Now Coveright have only contributed 3 quarterly earnings to Analabs results. Taking the numbers from the segmental results, I have compiled it and placed it right below. This way we can see Coveright performance before and after.

Oh.. Coveright 2009 numbers... missing. :( :(

Yeah.. don't ask me... I cannot seem to find it.

Here's my flawed interpretation.

1. It's like I am looking at two different companies. The one in yellow was less profitable. (Ok, we are missing 2009 numbers). The one in yellow was Coveright performance before it was acquired by Analabs.

Ok.. perhaps I am being overly cautious and there could be a logical reason why the business economics had changed for the better. For example, a better selling price for their products could be a reasoning. ( Now if I am seriously an interested investor, I reckon it would not hurt me to find out more. LOL! Yes.. get out of my lazy chair, move it move it! Stop staring at Shakira and her Wakaka! friends kicking and diving and play acting while chasing one round ball! :P )

2. Q4 numbers (ie Coveright earnings) dropped substantially versus Q3. Sales dropped. Earnings and its margins also slumped. Why?

And this is where it's tricky.

Is it seasonal? Is it a temporary factor?

Me?

I stick to the easiest solution. LOL! LOL! Which is to say 'its way too early to pass judgement!! :P

But of course... for the really, really, really cynical bugger... the bugger would be thrashing out the conspiracy theories and indicates the extreme goodness of the numbers.

ROFLMAO!

Yes, the numbers were too good to be true. :P

What do we have? 11.054 million profit from a sales revenue of 69.827 million was contributed to Analabs earnings this fiscal year.

And how much did Analabs paid for it? 32 million!

Of course, it's indeed a superb buy!

But then the really, really, really cynical bugger would be asking is the owner of Coveright Surfaces silly or what? :P

Yes... if the company does make 11 million from a sales revenue of 70 million, or a profit margin of 15%, why on earth did the owner sold this business for a mere 32 million???? Something smelly?

LOL!

And needless to say, if it's indeed so good, why should Analabs minorities complain? They be rather silly if they did, yes?

How?

Update On Analabs Earnings

Analabs reported its earnings. It made a net profit of 3.640 million for the quarter, giving it a total earnings of 15.389 million for its fiscal year 2010.

Which is very impressive when one starts comparing it versus what it had achieved the previous year.

But then... on a q-q basis, the earnings was terrible.

Ah yes, yet another interesting issue. Should one look at a y-y comparison or should one look at the q-q comparisons?

On a y-y comparison, its 3.640/15.389 million earnings was very impressive. Last year, Q4, it made only 1.376 million and had a total earnings of 9.373 million for the fiscal year. Bravo.

On a q-q comparison, last quarter, it made 5.639 million. So the 3.640 million is rather a shocker yes? Why such a big decline?

Balance sheet comparisons.

1. Cash. This quarter 9.949 million. Last quarter 11.848 million. Last year 32.272 million.
2. Receivables. This quarter 26.924 million. Last quarter 25.275 million. Last year 7.812 million.
3. Investments in quoted securities. This quarter 14.544 million. Last quarter 14.863 million.

As mentioned before, the huge shrinkage in cash was because it bought a stake in its subsidiary for 32 million! Yeah... subsidiary.

How?

From the company's earnings notes:

• For the quarter under review, the Group recorded a revenue of RM36.7 million, which is an increase of 173% compared to the revenue of the corresponding quarter of the preceding year. This increase was contributed by the newly acquired business of manufacturing and sale of resin impregnated papers by RM25.2 million but was set-off by the lower contribution from the other business segments due to the weak prevailing operating environment vis-à-vis the corresponding quarter of the preceding year.
  
  As a result of the positive and substantial contribution in turnover mainly from the business of manufacturing and sale of resin impregnated papers and relatively lower raw material prices, profit before tax for the current quarter recorded an increase of 154% as compared to the corresponding quarter of the preceding year

This was the previous posting on Analabs: A Look At Analabs Earnings

Analabs

Analabs just announced its earnings 2007 Q4 earnings tonight. Quarterly rpt on consolidated results for the financial period ended 30/4/2007

1. Q4 earnings on a y-y basis was ok but poor on a q-q basis.

2. Poor track record since fy 2002 but the company has performed pretty well this year.

3. This was what the company said in its notes.

• The Group’s turnover for the year ended 30 April 2007 at RM35.403 million was higher compared to RM34.141 million for the corresponding period in the preceding year, representing an increase of 4%. The major contribution of the revenue was derived from formulation and repackaging of chemicals segment and recovery and sales of recycled products.
  
  Profit before taxation increased by RM4.447 million or 101% mainly due to increase in contributions from formulation and repackaging of chemicals segment, recovery and sales of recycled products segment, and gain on disposal of quoted investments for the year ended 30 April 2007.
  
  The decrease in revenue for the current quarter as compared to the preceding quarter was mainly due to decrease in revenue contribution from formulation and repackaging of chemicals segment and aqua-culture divisions.
  
  Profit before tax of RM1.075 million was higher than the loss before tax of RM0.453 million for the corresponding period in the preceding year mainly due to the gain on disposal of quoted investment in the equity market for the current quarter as compared to the preceding corresponding quarter which included an allowance for diminution in value for OTT investment in South Africa.

4. Company dabbles in the share market. The current fiscal profit of 8.325 mil is boosted by disposal of securities, which saw Analabs gaining 1.837 mil from its disposal of shares this fiscal year. Some folks hate such share dabbling!

Currently, as stated in the earnings notes, "The investment of RM5.096 million in the condensed consolidated Balance Sheet for the current quarter has been reclassified as non-current assets". The market value of these shares is now worth rm6.094 million.

5. Cash balance is extremely healthy, so is the cash flow. Net cash is now 35.197 mil.

6. Dividends.

Decent improvement in payout since fy 2005 but pale in comparison since fy 2002.

Now company has tons of cash, hence it is argued that it should have done much better in sharing its wealth back with its shareholders.