Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Diligent annual profit slides 40% as restatement costs mount

Diligent annual profit slides 40% as restatement costs mount; shares hit four-month high

By Paul McBeth

Feb. 28 (BusinessDesk) - Diligent Board Member Services, the governance app software developer, reported a 40 percent slump in annual profit as the cost of restating its accounts overshadowed revenue gains after a series of accounting blunders.

Net profit fell to US$6.4 million, or 5 US cents per share, in calendar 2013 from US$10.7 million, or 9 US cents, a year earlier, the New York-based, NZX-listed company said in a statement. Revenue surged 66 percent to US$64.8 million from a revised down year-earlier figure. General and administrative expenses jumped 92 percent to US$18.4 million and the company faced special committee and other one-time costs of US$7.8 million. It expects more costs to come in the first quarter of 2014, it said.

On an operational basis, profit rose to US$10.3 million from US$7.6 million, Diligent said.

The shares gained earlier today after the company said it would meet today’s deadline, and rose as high as $5.05, a four-month high, recently trading at $5.01, up 6.6 percent.

The company had until today to file restated accounts after recognising revenue too early under US GAAP accounting rules to avoid having trading in its shares suspended by the stock market operator. The effect of the restatements reduced previously reported revenue by US$4.6 million in the year ended Dec. 31, 2012.

“We lacked a sufficient compliment of trained finance and accounting personnel and did not establish adequate accounting and financial reporting policies and procedures as a general matter,” the company said in an explanatory note. “In particular, there were material weaknesses in our control environment and the design, establishment, maintenance and communication of effective controls relating to revenue recognition.”

During the review, Diligent found it had to reclassify a note receivable from a related party and has recorded provisions of US$700,000 and US$500,000 for the 2013 and 2012 financial years relating to uncollected sales tax in certain US states.

The company is still reviewing internal controls and will provide an updated assessment and related remedial activities in its amended annual report, it said.

Diligent had previously said it had 2,450 client agreements as at Dec. 31, from 1,808 a year earlier, with a client retention rate of 97 percent.

It had an operational cash inflow of US$27.1 million in 2013, up from a restated US$22.8 million in 2012, leaving it with cash and equivalents of US$56 million as at Dec. 31.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news