Executive Summary: November 23, 2009
By Scott Rochfort | smh.com.au | 23 November
Profit flop takes fun out of funny business.
The erectile dysfunction company responsible for the controversial billboards lining many of Sydney's busy thoroughfares has slumped to a $US15.4 million ($16.8 million) full-year loss. This compares with the $US4.8 million profit the previous year.
The Sydney-based and US-listed Advanced Medical Institute, which claims to have helped 300,000 men sort out their troubles over the years, has finally released its accounts to the US Securities and Exchange Commission after a six-week delay.
The institute, which has 22 centres spanning Dubbo, Wollongong, Sydney, London and Auckland, enjoyed a 24 per cent surge in
premature ejaculation treatment revenue in the period, which helped counter the slide in revenue for erectile dysfunction treatment. But this was not enough to stem the red ink.
"Economic conditions were difficult for the company over the past 12 months," AMI explained in its accounts. It blamed its troubles
on the global financial crisis, "some ineffective advertising" and its costly entry into the British market.
"Competition is intense in the erectile dysfunction segment of our business and includes many competitors that have greater revenue, more customers and higher levels of brand recognition than the company," AMI said. It is now embarking on a cost-cutting drive.
The company disclosed it had spent $US22.4 million on advertising in the year, up $US4.4 million from the previous period. To put this amount into perspective, it is about half of what David Jones spent on advertising in calendar 2008, according to Nielsen Media.
The company said it was continuing to research and develop "new methods of treatment in relation to the treatment of sexual dysfunction in men and women, including impotence, premature ejaculation, reduced male libido and female sexual arousal
disorders".
"AMI's chief executive officer,
Dr Jack Vaisman, spends 25 to 35 per cent of his time each year researching treatment methods," the company said.
PIG WON'T FLY
The Jeff Kendrew-headed company formerly known as Babcock and Brown Infrastructure will not have the ticker PIG after all. The rebadged Prime Infrastructure Group will begin trading under PIH from December 7.
COST OF LIVING
The beds and breakfast at the Savoy in London were no doubt first-rate, but Jodee Rich might yet regret staying there when Justice Bob Austin's court had a brief British sojourn. The judge and parties in Australian Securities and Investments Commission v
Rich & Silbermann spent nine of the 232 hearing days in London.
The choice of digs could prove significant in the sensitive matter of costs.
Austin gave ASIC such a ferocious caning that he anticipated in his judgment that Rich might ask for an order that ASIC pay his costs on what the lawyers call an indemnity basis.
That's what the winner actually spent as against a normal costs order, which is the winner's "reasonable" costs.
"Justice normally requires that costs follow the event, but that does not mean that the unsuccessful party should pay for every expenditure incurred in relation to the case, however lavish, or for costs not properly attributable to the case," Austin said.
"According to information provided to me during the hearing, counsel for ASIC was accommodated modestly, while the defendants and their team stayed at
the Savoy."
An indemnity costs order would have equally unattractive alternative outcomes: ASIC would have to pay for the Savoy; or the court would have to sift through all the bills applying a luxury discount.
This poser will be addressed on hearing day 233, on Friday.
THIRD AGE LUCKY?
Gold Fields House on Circular Quay seems to have become the new hotspot for recycled business ventures. Several former principals of the collapsed Allco Finance Group have set up a new firm called Sturt Capital Partners in the building.
And now one former business partner of the Bill Ireland-founded and floundering Mariner Financial Limited has resurfaced in thebuilding with what seems to be an old business idea.
Scott Marinchek will host cocktails and canapes at the Museum of Contemporary Art on Wednesday night to promote his new venture, Aviiid Third-age Living.
Aviiid, which also has former Mirvac senior living boss Greg Mullins on board as an executive director, says it aims "to improve the affordability, quality, availability and operation of accommodation and care of Australia's fastest age group".
"Aviiid believes that a critically different way of thinking is required to provide sustainable third-age living solutions for the ageing population," says a blurb promoting Marinchek's venture.
"Our aim is to revolutionise senior housing, lifestyle and care services by promoting freedom, dignity and choice for consumers while creating transparency, liquidity and risk management flexibility for investors," it adds.
Sound familiar? When Marinchek helped set up Mariner's Third-Age Retirement Living division in 2007, he said the outfit "aims to restore choice for people as they decide where and how they wish to live in their retirement".
Mariner at the time said the Third-Age tag was inspired by the French term "Troisième Âge".
CAVEAT PLATINUM
Be warned if you ever intend to use the word "Platinum" to help promote your financial business. The Kerr Neilson-headed Platinum Asset Management has launched action in the Federal Court over the alleged breach of its intellectual property by a Perth accountant.
Salvatore Vallelonga has used the platinum banner for a number of his ventures, which range from accountancy, home loan finance, life insurance, financial planning, property development, superannuation to business consultancy.
First published by Smh.com.au on November 23 2009
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