Radar reported a decline in both revenue and profitability for the year ended 30 June 2015. Revenue for the period was down 16.63% to $6.8 million due to an 11% reduction in sales volumes at Macdonald Bricks. Average selling prices realised also softened resulting in lower margins. The drop in revenue coupled with impairments totalling $179,302, resulted in a decline in operating profit to $124,302, down 90.1% from $1.3 million prior year.
The Group has high finance costs having paid $971,324 in the period under review, down from $1.0 million paid prior year comparative. The Group has borrowings of $5.9 million, the bulk of which remains short term in nature, down from $6.5 million. The average cost of debt is currently at 13.7% which we believe is unsustainable going forward, considering the weak current ratio of 0.44. Prospects for future earnings growth are also not that encouraging which is not a good sign.
Positive cash generation
The Group improved its cash generating capacity with a total $1.8 million having been generated from operations, up from $1.3 million prior year. The generated cash was enough to repay borrowings amounting to $841,137 and also interest payment of $958,563, remaining with net cash of $344,957 for the year.
Going forward the prevailing economic environment is expected to persist, characterised by tight liquidity and subdued aggregate demand in the construction sector. As a result prospects for future earnings growth are not encouraging.
Radar Holdings Limited info table is from Sep 23rd, 2015 | All prices are in US cents unless otherwise stated.