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Engin Trading Halt Ahead Of Announcement |
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Written by Adam Gosling
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Thursday, 14 September 2006 |
Just after we reported on VoIP News that the engin share
price had spiked since last Friday before returning to normal on Tuesday, the company
has requested a trading halt ahead of a major announcement.
Since we last checked it the share price had gone back up - making
our "What's Up At Engin? Not The Share Price (Anymore)"
headline out of date almost immediately. The price rose again to reach 30.5 cents at the end of Wednesday.
At that point Engin asked the Australian Stock Exchange to
pull the shares form trading saying the company was about to make a "significant
announcement".
In response to a price query from the ASX, the company
replied on Tuesday saying it had no idea why the share price might have risen
so sharply on Friday and Monday.
Although the company confirmed it was seeking additional
capital to fund future expansion - it
obtained shareholder approval to get the extra cash in July - it said there was
no firm deal in place that it could report.
"The discussions are continuing and no agreement on any
particular transaction has been reached. The Company is currently seeking
advice on the possible options from its advisers. There is no certainty that
any corporate activities will eventuate from these discussions," said the statement.
However, it seems the market snoops were onto some sort of
deal as the company now says it plans to make an announcement tomorrow (Friday,
15 September).
The ASX has placed the shares in pre-open until the
announcement is made.
The Directors of engin also confirmed in their response to
the price query that there was no surprises in its end of year financials and
true to their word, the preliminary report filed today shows that the company
is on track.
And that's could well be supporting the share price.
Especially if the company has found a good deal for future funding.
The fiscal year to June 30, 2006 was a bumper result with revenue
up by 458.9 per cent to A$8.6 million.
That's not to say the company is making any money, which is
why it needs to look for more capital. It had only $3 million left in cash
reserves after raising A$9.4 through the last fiscal year.
It was the company's first full year of trading in its new
form after separating itself from the mobile phone business it grew from.
Net losses from operations for the 2005/6 fiscal were A$7.5
million that's up 65 per cent on the (not comparable) year prior. This was after
a tax benefit of A$3.3 million putting operational loses at A$10.8 million for
the fiscal year.
As the business has grown significantly through the year all
its major costs have gone up, employees, marketing, communications leaving not
much money in the kitty for this years operations.
Without funding to finance continuing operations, the
company probably would not have survived much longer, so the assurance of a new
cash top up would be giving investors cause for confidence.
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