MYOB Limited

Before Christmas this accounting software provider presented a trading update for its financial year ending 31 December. The company said it had a strong year and is expecting to deliver an excellent full-year result for 2003. Management has indicated that it expects revenue to be around $88.5m, up 17% on 2002. The company also expects to deliver an operating profit of around $32m, up 22% on 2002. Net cash is expected to be around $20m. 2004 is shaping up as another strong year with revenue expected to grow by around 15%. MYOB is shielded from the rise in the Australian dollar because most of its sales are domestic, but whether the Australian market can sustain this level of growth in 2004 is anyone's guess. With the company's share price up 24% since issue 131/Jul 03 (Hold for the Upside-$0.85), we're becoming a little more cautious. But, for the moment our recommendation remains HOLD FOR THE UPSIDE.