Friday, May 23, 2008

DDE Update

Hi all :-). I just wanted to provide a brief update on operations over the last few weeks. The dividend and buyback for April went ahead with only a few glitches - relatively smoothly all things considered...

Business in the last six weeks has been slower than normal - the number of unrented plots on DDE sims is higher than usual, but I have begun to advertise recently (something I haven't had to do in almost a year!), and I am hoping to be back up to normal occupancy levels soon. The Openspace sims have been doing well - so when one of my regular sims was vacated, I put in a ticket to convert it to 4 Openspaces - and have been waiting a couple of weeks for the Lindens to complete the ticket - a measure I think of how many land orders they have received recently. Of course, this has resulted in half a month of no rental income on this sim in addition to the low occupancy.

As a result - revenues for May are expected to be less than usual - and although DDE is still nicely profitable, I am going to start setting aside some cash every week to ensure that if things get worse in the market, i will have sufficient cash to cover tier for at least a month at all times. Given that the monthly tier level for DDE is approximately 2m Lindens - this will be a drain on liquidity.

I am going to wait until the final May numbers are in before making a decision, but it is possible that in May there will be no share buybacks - although I am still expecting a regular dividend payment. Again depending on the final May numbers, I may forego or significantly reduce my salary for May and contribute it to the dividend payment. I want to make sure that you are all taken care of.

The effect of this is in some ways beneficial to shareholders, since it removes one month of buybacks at the lowest price (2.50L per share) - I will stick to the schedule I have published and share buybacks will increase to 2.75L per share in July as promised.

Please let me know if you have any questions, comments or concerns about this plan.

dd

1 comment:

Anonymous said...

Dear Del,
I just want you to know that I'm very pleased with the way your handling the DDE business.
As your shareholder for a long time I'v seen what you did and have
the feeling that my investment is in good hands.Under the really difficult circumstances of specially the last half year, you were able to build up such a positive image.
And I'm only sad that not many
CEO's in SL have the capacity or the vision you have.
I wish you the strength to continue in this way.
Your satisfied shareholder.
Richy Brynner