Advance NanoTek Limited (ASX: ANO) manufactures advanced nano materials and nano material products. The Company offers metal oxide powders, aluminium oxide pigment, and dispersions of zinc oxide for use in the cosmetic and suncare industry. Advance NanoTek serves customers worldwide.
The company has briefed in its latest release stated that the Company Auditors have commenced the half-year review and have found an adjustment to the company’s foreign currency exchange. As a result, the firm’s first-half profit after tax has risen approximately by 30% on the previous result of $1.25 million to approximately $1.6 million. Following the release, the share price of the company decreased by 2.075% on January 10, 2019.
The adjustment in foreign exchange is due to the significant decrease in the Australian dollar as at 31 December 2018 positively affecting ANO deposits for raw materials (significantly increase in value) and deposits for production equipment not taken into consideration in preliminary results.
Due to this mistake, the management has apologized to the investors and have appreciated the Auditors for their due diligence in highlighting the adjustment.
In the latest release, the company had declared their results for the 1H 2019. As per that, the company had achieved a net profit after tax of $1.25 million, (up 105% from $607,000 for the corresponding period last year), based on unaudited management accounts for the first half of FY19. The result did not include the R&D benefit or any potential audit adjustments for foreign exchange with further income tax benefits to be brought in at the end of FY19 above the FY18 levels of $1.5 million. These results were subject to no significant mechanical equipment breakdown and no delays with the company’s raw material supply partners and any other unforeseen circumstances.
The company had witnessed significant growth in the sales of XP Powder, particularly in the USA, with one customer ordering six times (up 500%) more than the volume of orders from the prior year.
The management is of the view that, based on all current sales forecasts from the firm’s distributors and customers from January to March, the company’s Board believes that the growth in the second half will be in line with prior periods.
The staff and the management, despite numerous obstacles, have delivered a 300% increase in a maximum capacity not counting, upcoming installation of new ovens and automated production lines in Brisbane.
The Board said that it would like to also appreciate the production staff and management for achieving this fantastic result despite three weeks of production loss due to the transfer of equipment to combine smaller facility in Perth. As per the Board, the result was particularly pleasing as the first half trading usually is slower due to the seasonal nature of company’s sales, with 75% of company’s sales derived from Northern Hemisphere distributors during their spring.
Meanwhile, the stock price of the company has risen by 127.52 percent in the past six months as on 10 January 2019. ANO’s shares traded at $1.18 with the market capitalization of circa $69.21 Mn as on 11 January 2019 (AEST 2:33 PM).
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