Ellipsiz has released its Q3-2010 results.  Revenue rose 23% to S$37.6mn with net profit of S$1.53mn from a loss of S$28.6mn over the same quarter in 2009 from the fire.  For the nine months, revenue was lower by 10% to S$104.8mn and a net profit of S$14.9mn.  EPS for the nine months is 2.93 cents with NAV at 17.5  cents.  But investors should be aware that about S$0.9mn of the Q3 and S$19.2mn in the 9 month results came from its insurance claim income.  Excluding this would show what is the recurrent operating income for the company,  The figure is small for Q3-2010 and a loss for the nine month period.  The growth in revenue and weak profit is consistent with the guidance that management had given us earlier this year, ie that they were facing pricing pressure despite the recovery in the business.

In my April 27, 2010 Blog, I was surprised at the price rise in Ellipsiz to my price target of S$0.18 as this didnt seem to be supported by the fundamental outlook of the business.  I advised that investors should take profit in the share and also removed it from my Stock Picks.  the Q3-2010 results confirm the weak outlook which is consistent with what management were indicating.  The company's gross cash has increased to S$41.86mn up from32.43mn.  Net cash is S$29.2mn or abot 6.5 cents per share.  No compelling reason to own the share now.  Will KIV with a view of recommending it again should we see a stronger recovery in core earnings.