Analytica achieves its first positive cash flow

Analytica has posted its first positive operating cash flow on the back of its takeover by listed medical diagnostics group Psiron (ASX: PSX) last year.

In December last year, Psiron became the major shareholder in Analytica (ASX: ALT) and also sold its diagnostics business to the ailing company.

The move followed a difficult year for Analytica, whose previous business focus had been in the research and development of human therapeutic products as well as the manufacture and distribution of the Yoland Lim and Slimax brands of Chinese medicines.

The company ceased trading on the Australian Stock Exchange after it was placed into voluntary administration on May 8, 2001.

CEO Ron van der Pluijm said the turnaround, albeit modest, was a result of the major restructure that saw the company alter its direction and join a biotechnology alliance with Psiron, Queensland's CBio and investment company Australian Technology Innovation Fund (ATIF).

Van der Pluijm said the new medical diagnostics business had performed well, showing there was further scope for Analytica to expand its operations in that area.

"This is the first full-quarter result posted by Analytica since it acquired the diagnostics business from Psiron and the earnings and cash flows achieved show there is great potential for further growth," he said. "The contribution from diagnostics, as well as stringent cost control, has given us an extremely encouraging result.

"Analytica's strategy is to build on the strengths of the existing diagnostics business through further expansion."

He said the company was already working towards this goal with the signing of an agreement to extend its existing product range.

Since purchasing the diagnostics business, Analytica has recorded an operating cash flow of $14,000 and a profit of $53,000 on an earnings before interest, tax, depreciation, amortisation and research.

Taking away these factors, the company posted a net loss of $30,000.

Its statement to the market revealed that at the end of the quarter, the company had $147,000 cash on hand.

Although relatively small figures, the result is a vast improvement on a year ago when Analytica revealed a loss of $5.2 million in the six months to December 2000.

Van der Pluijm, who is also CEO of Psiron, said the company was currently assessing its intellectual property portfolio and intended to recommence ASX trading within months.