Time and tenders tell if Argus gets back in top form

Argus waits for verdict on tenders to know if it will achieve 2011 sales outlook.

At its annual general meeting, chairman, David Paterson described the year ended 30 June 2010 as “a very difficult year”. It has also been a time of rapid change and transformation for the company, with major events including the acquisition of the Moore Australasia business in January, followed by the sale of the Argus business in February and the recapitalisation of Argus in August.

“A major part of today’s business involves the resolutions before shareholders of the two debt payment and subscription agreements which provides for the recapitalisation of Argus,” Paterson said. “The funds provided from these two transactions should provide sufficient working capital for the company to stabilise its existing operations and provide a sound platform for further organic growth.”

In October, Argus announced a future outlook for the year ending  30 June 2011 for total revenue in the range between $54 million and $57 million, with projected earnings (EBITDA) between $1.2 million and $2 million.

So far, monthly sales in the first quarter of this year have increased from $3.1 million in July to $4.2 million in September, with sales for the first three months of 2011 inline with the future outlook.

Now, the pressure is on. In order to achieve the 2011 future outlook, the monthly sales figure needs to increase further to some $5.5 million by June 2011. According to a statement, the ability to achieve the increase in sales will depend on the results on a number of tenders that the company has recently submitted.

Sales at this level equates to annualised total revenues in the order of $65 million. “Given these sales are achieved, the company will return to its historical performance levels by the end of the financial 2011 year,” Paterson added.