Elexir 'not yet out of the woods`

Elexir Technology Holdings has sustained the turnaround reported at the interim stage, achieving a net profit of R4.52 million for the year to August, compared with a loss of R9.84 million the previous year.

Although the group`s auditors, Russell Bedford Southern Africa, have issued an unqualified opinion on the results, they have noted that current liabilities exceed current assets.

This indicates that "while the group`s financial position continues to strengthen, it could still be exposed to significant demands on its cash resources".

The balance sheet shows current liabilities of R21.39 million, against current assets of R15.55 million.

Elexir`s previous auditors, Fisher Hoffman PKF, resigned this year after issuing a qualified audit opinion on the interim results and reporting what it said were material irregularities within the company.

The new auditor subsequently reviewed the material irregularity reported as well as the directors` reply to the allegations and deemed their response to be "satisfactory", saying no further action was required.

CEO Brett Casey says the turnaround in profitability was achieved through improved sales and stronger financial management.

He says the group acquired assets, at nominal cost, which provide good prospects for generating strong annuity income.

The assets were revalued on the basis that "they will further improve the group`s financial results from opportunities developed within the telecommunications area and the outsourcing of security management and bandwidth management".

The group restated its opinion that continued profitable trading enhances creditor claims over the assets of the company.

The Elexir share was untraded at 2c on the JSE this morning.

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