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

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news