Amrad forecasts profit, acquisitions

Amrad’s bulging coffers and a good prognosis have helped it forecast an overall profit for the year to June 2003, according to latest figures from the company.

Amrad Chairman, Olaf O’Duill, said the forecast was the successful outcome of a year’s hard work of deal-making, internal restructuring and keeping a sharp focus on reduction of cash burn.

“Now we have close to $60 million in cash, we will concentrate on running a tight ship, reducing the cash burn and maybe start to look around at other companies who have good science but are undervalued,” he said.

“The forecast shows Amrad has weathered the broader market downturn. I am pleased to advise shareholders that the company is entering a new phase of growth and development,” he added, “one based on tightly managed and prioritised cash flow rather than an unacceptable cash burn.”

Last week’s announcement of the deal with Merck Sharp & Dohme upped Amrad’s value by $US5 million, and this, along with the Serono licence agreement expected to boost core profits, and the sale of Amrad’s Richmond property are all bonuses for the company’s bottom line.

O’Duill noted that stringent management processes had helped to control costs whilst ‘optimising R&D opportunities’ at the same time.

If this does mean Amrad is now on the acquisition trail, financially ailing companies with sound technology should not get too excited, however. “We are going to be careful. We shall not be rabid about this, but will see if there are any companies that have technology that will complement the product we already have,” cautioned O’Duill.

“If I have one criticism about the way Amrad was previously, it was that it didn’t demonstrate to the market the value of its science. These recent deals don’t come every year, but they have helped show that our technology does have real value,” he added.