Ann: FIRSTFOLIO SIGNS HEADS OF AGREEMENT TO RAISE, page-9

re: Ann: FIRSTFOLIO SIGNS HEADS OF AGREEMENT ... roughie ... post re-capitalisation they will have around 3 billion shares on issue. At 7 cents that is a market cap of $210 million (plus around $17M of debt - inclusive of deferred considerations). I'm curious as to how you get that valuation given:

(i) If I take a simplistic approach and double expected half year EBITDA then annual will be $16.56M. You actually believe EBITDA multiple of 12.5+ is reasonable? MOC is on <6. Adopting 6 would give share price around 3.3 cents.

(ii) With a quick and dirty "$16.56M less $1M interest less $3.5M tax provision give $12.06M profit". Actual profit will be less than that due to amortisation, however given that is now a "legacy" issue and not needed to pay down debt can be considered a cash surplus. A generous PE of 10 would see market cap of $120M or 4 cents.

I haven't looked into it in more detail, however see no real reason why it would be worth anything more than 4 cents at very best - and that's assuming the market is that generous (will they be for this company?). The financials will have a lot of legacy issues which likely explains why FFF focuses on EBITDA pre abnormals rather than what their accounts actually show.

Anyway, I have no vested interest however your 7 cent claim prompted me to see how realistic that seemed. If I've missed something let me know.

MJS