AdBri Investigates 'Hidden' Underpayments
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Adelaide Brighton shareholders were remarkably relaxed about the news yesterday of a bad debts problem that could end up as $14 million earnings downgrade for 2017.
Adelaide Brighton told the ASX yesterday that it was investigating some transactions which may have hidden customer underpayments for supplied products.
With the help of forensic accountants KPMG, the company says it is also looking at whether an employee could have been involved.
AdBri told the market that the underpayments may adversely affect 2017 earnings by up to $14 million, less any amounts recovered.
Consequently, the company expects there will be an additional provision of $14 million made for doubtful debts.
“While the investigation is still in process, based on the information currently available, it appears that there may have been deliberately hidden underpayments by customers over a sustained period,” Adelaide Brighton said in yesterday’s statement to the ASX.
Adelaide Brighton has reported the matter to its auditors (PWC) and says it will co- operate with relevant authorities as the investigation proceeds.
Excluding the one-off impact of the issue, Adelaide Brighton confirmed its guidance for an underlying profit of between $188 million and $198 million for the 2017 full calendar year.
AdBr shares eased 0.7% to $6.30.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.