Obviously this share will see 8 before 28,
as CBTSY refocusses!!
CBT reported Q3 revenues, which, came in at $49.9m
(vs an expected $48m and compared to $47m in Q2)
and EPS at 14c (vs an expected 11c and 12c in Q2). Faster
than expected revenue growth, tighter control of
overheads and lower forex charges led to the
improved EPS figure. The Group had issued a profit
warning in Q3 1998 and, as a result, the backlog (i.e.
future contracted revenue) brought forward from
that quarter was expected to be lower. Despite this,
the Group reported considerably improved
operations. Customers are now renewing
contracts at 139% of previous contract value (vs
69% 1 year ago). The average contract value has
increased to $94K from $86K.
More significantly, the Group unveiled its new
electronic learning strategy and new corporate
name. It is repositioning itself from being an
education/training courseware vendor to being a
provider of electronic learning solutions over the
Internet. This will require investment in the region
of $50m next year (at Q3 the Group had $100m in
cash). Dublin analysts had forecast a net profit of
$35-36m for the
year to December 2000, the Group now expects net
losses of $20-25m. Furthermore, accounting rules
will require the Group to recognise the revenue
portion of its contracts equally over each quarter,
resulting in an apparent slow down in sales growth.
However, in the short-term, adverse US
sentiment may continue to impact negatively on
the share price. |
