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Summary Announcement. Solco. Financial Update
Date of Report: 29-Jun-2006
Solco Ltd (ASX: SOO) expects an EBITDA loss for the full year ending June 2006 of $2.3 million on projected revenue of $15.8 million. The estimated EBITDA loss for the second half year is expected to be in the order of $1.66 million on forecast revenues of $5.9 million. The loss in the second half reflects recent restructuring efforts.
This EBITDA loss follows a detailed review of operations by external consultants and the resignations of the previous CEO and CFO on April 3 2006. Significant once off restructuring costs and write-offs have been incurred to address operational problems identified in the external review.
The focus of the restructuring effort has been to return the Company to a cash positive and profitable operating position as quickly as practicable. Steady improvements in the underlying operating performance are being achieved.
The Company has restructured its business into a Power Division (the national Choice Electrics solar power products distributors based in Brisbane) and the Water Division based in Perth.
Gross margins are expected to improve due to a marketing focus on profitable areas, outsourced manufacturing, and stream-lined processes and cost reductions. In addition, stronger working capital and overhead management practices have been implemented, in part by better leveraging the successful Choice operation and experienced management team.
Management is now returning its attention to pursuing its vision to become a global leader in the decentralised sustainable power and water market. Solco is examining alternatives to expand its offshore licensing of its unique polymer solar hot water system as a result of encouraging ongoing technical and marketing work.
Solco’s domestic business is moving into emerging segments that are seeking to reduce their reliance on traditional high cost non renewable power sources. Solco’s range of solar power, thermal water heating and water pumping packages have a demonstrable immediate competitive advantage in sectors such as the mining, new eco residential developments and solar grid power systems.
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Solco
since my initial post on Solco in January, the previously forecasted $18mil rev turned out to be $16 mil, whislt the profit forecasted in December turns out to be a $2.3 loss (and thats just EBITDA!)...
....the previous key management team has walked and the company is continuing to 'restructure' (as they have been for the last 18 months)...
...the qtrly cash surpluses have turned into substantial deficits..
...oh yeah, the major shareholder is selling down as well!! with no sign of stopping!
so, what looked so promising at the start of the year has ended miserably...the company is basically where it was about 18 months ago, has a long road ahead of it to regain credibility and market interest...
Share prices follow earnings....buy EPS growth!!
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@ steve fleming
....ended miserably ??
Look at Frankfurt. On 30.06.2006 SOLCO share price jumped up to 0,15 Euro.
Trading volume 10.272.298 shares = 1.499.037,75 Euro !!!
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up to 0,15 Euro and again down to almost 0,10 Euro !
Reason: push by a German stock letter recommendation followed by the usual fall back! What a crazy game!
Nothing changed at SOLCO: business as usual. Expect news very soon.
Stay cool....
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quote: Originally posted by StockExplorer
up to 0,15 Euro and again down to almost 0,10 Euro !
Reason: push by a German stock letter recommendation followed by the usual fall back! What a crazy game!
Nothing changed at SOLCO: business as usual. Expect news very soon.
Stay cool....
Big placement to Germans @18 cents....Stock explorer - what is the Germans fascination with this stock???
Share prices follow earnings....buy EPS growth!!
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Todays environmental problems have led to increasing demands for environmentally harmless, long lasting and high quality products.
Germany is far ahead of other countries, concerning the environmental business (Solarworld, Q-Cells, Conergy, etc.).
In Australia / New Zealand it is a starting market.
One of the most interesting companies in Australia is SOLCO Ltd.
SOLCO products help to create a sustainable and healthy environment and improve populations' quality of life.
SOLCO products: solar water heaters, solar pumps, solar power systems and water solutions (clean water / waste water treatment).
Solar Energy Systems (now SOLCO) was established in 1998.
In September 2004, Solar Energy Systems acquired Solco Industries; a solar hot water systems manufacturer established in 1988. Choice Electric, with 16 years of profitable operation, was purchased in March 2005.
SOLCO has manufacturing licensee’s in Sri-Lanka, Mauritius, Malaysia, Borneo, the Philippines, Portugal and on Malta.
SOLCO Total Revenues
2004: 2,30 Mill. AUD
2005: 10,23 Mill. AUD
2006: 15,80 Mill. AUD
The company is on target to break even this year.
SOLCO Ltd. is ready for today’s and tomorrow’s markets!
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On 30.06.2006 a German stock letter (NTV page 299/Frick) recommended SOLCO as a buy. The Peak with 0,153 Euro was on that day.
Now we experience an extreme fall of SOLCO share price.
This has nothing to do with the SOLCO business!
It’s simply a bad but wellknown manipulation by short selling.
Due to the falling share price many shareholders got nervous and sold their shares. It was the intention of the short sellers to bring the share price to an all-time low.
On one of the next days we will see a huge buy of SOLCO shares and the share price will rise again.
For Australia and New Zealand - being ahead of Europe - it is a chance to buy shares before short sellers will do it.
This is no recommendation to buy SOLCO shares!
I talked with SOLCO Chairman Robin Forbes on Friday (14.07.2006). Robin: "We expand the operations particularly in the solar part quite significantly. We are pretty well on budget." An SOLCO update will be issued probably next week.
So, I'm fairly optimistic....
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G8 Summit: most countries favourite nuclear power for further use, even not knowing where to leave the nuclear waste!
With those world leaders mankind will never survive !!
Isn't crazy to use an electric heater, instead of using endless and inexpensive solar power ????
You better count on SOLCO .....
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Did someone ever presented a bill for the real costs of burning coal and oil?
Many of us have been a victim of a striking back planet. The future will be worse.
The increasing number of extreme drought, rain, storms, will cause very painful and expensive damage.
Not to forget health problems, caused by polluted environment.
The problem of today: just a very few clever people look ahead and see the consequences of today’s misbehaviour.
I’m using a hot water solar system for almost 10 years and I’m really happy with it. Even in Germany you can use it approx. 8 of 12 month without paying money for the production of hot water. The breakeven was about four years ago.
I hope, SOLCO management is doing a good job. The coming update will be interesting. SOLCO share price is already rising.
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), I have to point out that in no way is solar power inexpensive in todays market. If it was as cheap as fossil fuels, or even nuclear, we'd have no problems.
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