Photon fortunes improve but company still faces a debt mountain

Photon Group is showing early signs of trading its way out of trouble, the company’s preliminary report on the financial year suggests.

Shares in the company rose steeply on the ASX this morning – up from 3.9c at close of business last night to 4.6c at the time of posting.

Although EBITDA – earnings before interest, taxation, depreciation and amortisation –  profits were down again, from $65.8m to $49.4m, the company reported that it had cleared some of its debt mountain at a faster rate than expected.  

Photon said: “The company started FY2011 with total cash liabilities of over $450 million. Following the recapitalisation and the subsequent pay-down of debt from operating cash-flows and asset sales, as of June 2011 the company’s total unconditional cash liability is $146 million, comprising $118 million of bank debt under facilities in place until September 2013 and a further $28 million of unconditional cash deferred consideration payments. The deferred consideration payments are due over the next four years, with $15 million of those payments expected to be due in the next six months and the substantial portion of the balance due by first quarter 2012.”