In addition tax and cash dividends are paid on these "paper"...

First 21 Last

Share
Profile

Follow
wonchoy

28 Posts.

5

12/04/18

19:41

Post #: 32420260
Share

Originally posted by pikel1980 ↑

See the below from the last half year report (page 18):

Non-current Liabilities:
Performance fees receivable – Blue Sky managed funds $37,13,000 (an Increase of $8,293,000)
Receivables from Blue Sky managed funds $22,521,000 (an increase of $2,885,000)

As Blue Sky operate on an accrual basis, once they earn the fee (ie, the assets of the fund get re-valued upward), they are entitled to the fees, however they do not get paid until they realise the cash, hence why they are in the non-current liabilities. So they put the number into their revenue and call it earnings for that year.

None of the above is untoward or inappropriate, thats just how accounting works. HOWEVER, if the assets that have been re-valued cannot be realised - they never get paid the fees.

So of the $8,524,000 of profit reported in the last half year report, $11,178,000 hasn't been collected and they do not anticipate that they will collect it within 12 months. So essentially if you ignore the "paper profits" from funds, the business lost $2,654,000 for the first 6 months of the year - hence why Glaucus has targeted this company for a short.

Expand

In addition tax and cash dividends are paid on these "paper" profits. Accounting 101, this is not sustainable without huge cash reserves. If new investments and capital raisings dry up, then once the cash runs out its all over.

BLA Price at posting: $5.37 Sentiment: Sell Disclosure: Not Held
1 Upvote

0 Great analysis

Reply

Top Stories

Tuesday's HotCopper trends: Mesoblast, AuKing Mining, Tusker Minerals, and other daily topics

LISTEN: HotCopper Wire Podcast #053 – Safer bet to put cash in Pokémon trading cards

LISTEN: HotCopper's Penny Drop Podcast #1 – Uranium deals, PFS misses, & an Ebola opportunity

LNQ

LinQ Minerals hits high-grade copper equivalent intersections at Monza

The ASX Today: Quiet day down under as Brent Crude returns to US$85

First 21 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

In addition tax and cash dividends are paid on these "paper"...

Top Stories

Tuesday's HotCopper trends: Mesoblast, AuKing Mining, Tusker Minerals, and other daily topics

LISTEN: HotCopper Wire Podcast #053 – Safer bet to put cash in Pokémon trading cards

LISTEN: HotCopper's Penny Drop Podcast #1 – Uranium deals, PFS misses, & an Ebola opportunity

LinQ Minerals hits high-grade copper equivalent intersections at Monza

The ASX Today: Quiet day down under as Brent Crude returns to US$85

Featured News