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Positive news for September quarter

THE recent dot.com shakeout and current gloomy economic environment haven’t stopped two Perth-based online companies from posting their first positive cash flows.

Online financial services house Sanford Securities and adult e-tailer adultshop.com have both announced positive cash flows for the first quarter this financial year. The companies have weathered restructuring, a rapidly changing online environment, and one has even survived an investigation by the Australian Securities and Investments Commission.

adultshop.com turned a June quarter net operating outflow of $2.479 million into a $1.739 million positive cash flow in the September quarter. The company attributed the figures to revenues earned from recent acquisition, Today’s Success, as well as a reduction in staff and promotion costs. It is believed adultshop.com has reduced its marketing spend by $1.84 million.

The adult retailer bought Today’s Success, an adult online entertainment company, in July this year. The purchase coincided with ASIC investigating adultshop.com for a discrepancy in its record-keeping dating relating to work provided to adulshop.com prior to its rights issue. The investigation was wrapped up in August.

adultshop.com also recently purchased Mail Order Direct, a Canberra-based adult video mail order company, for $300,000. MOD’s subscriber base of 42,000 is expected to immediately generate revenue for adultshop.com.

“We are extremely pleased that the company has achieved this financial turnaround as predicted,” adultshop.com managing director Malcolm Day said. “This is a clear indication that the company has set the appropriate priorities and is heading towards a very successful year 2001/2002.”

Sanford Securities also achieved a positive cash flow for the first time in the September quarter. The company posted a $54.6 million net loss for the 2001 financial year but revenues have increased this financial year by 11.9 per cent.

Sanford Securities chief executive officer Steven Goh attributed the figures to seeing the benefits of its internal restructure and a renewed focus on core services.

“That improvement is reflected not only in the positive operational cash flow result but in improvements in revenue, both wholesale and retail, and a significant decrease in indirect cash expenses,” Mr Goh said.

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