WITH LUMPY COMES BUMPY

Finweek English Edition - - INVESTMENT -

We knew the long-awaited El­lies up­date would be bad. The com­pany had a bumper pre­vi­ous fi­nan­cial year boosted by one-off projects. The first half of this year had seen prof­its down and that was not likely to re­verse in the sec­ond half of the year. But HEPS down 65%-75% is more than what ev­ery­body was ex­pect- ing. In fact, a rough cal­cu­la­tion sug­gests the elec­tron­ics re­tailer may have had a loss-mak­ing sec­ond half to the year. The re­al­ity here is that El­lies has rev­enue (and hence profit) that is lumpy, and while I am sure man­age­ment is try­ing to re­solve this is­sue, it is un­likely to go away any time soon. In­vestors need to be pre­pared for a bumpy ride.

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