happy camper, page-14

tox's future keeps glowing brighter

THe question is: Where will TOX be one year? Two years?

I hope they are still trading as TOX because if they are given that opportunity, management will take this company to a level we once believed was only a pipedream.

Ive noticed that in the AGM presentation released today, the expected profit was still $3m EBITDA. Of course the cover page in the announcement said that this was being reviewed.

THis conservative approach adopted by management has really given them much credibility. Management I am sure released that if any profit forecast turned out to be a loss, the market would punish TOX accordingly.

At the beginning of the year, they announced that only $700k profit would be made within the first six months of this year. This figures was exceeded by 100%.

Now the latest projection of $3mil EBITA seems well and truly underestimated given $950k made in the first quarter plus $500k from the sale of equip. (I believe that the tank cleaning equip was written off last year along with other underperforming assets)

THe acquisition according to management should generate $750k per year based purely on their current contracts and synergies. However, I believe once Delvex is in TOX's hands, the profit generated from Delvex will be signifcantky higher. TOX stated in their announcement that they are looking to grow Delvex. Im sure if management could bring TOX almost from the brink of death a year ago, they will have no problem growing Delvex into a mjor and very profitable player. TOX will be expanding its service range into 4 new industries such as Industrial Cleaning, Onsite Services, Liquid Waste Treatment and Liquid Waste Collection.

The upgrade of the TDU cold increase throughout by 5 fold as suggested by preliminary enginnering with minimal increases in costs. (Refer to 24/8/05 ann)

The TOX resume is getting more and more impressive. THis will bode well when TOX decide to venture across the other side of the Nullabor. THey have WA covered now. Once they develop a presence in the eastern states, the company will take off to a wholenew level. I believe it has been a great strategic move by

A) Turning the fortunes of the company around and attempting to grow their existing operations organically. Concentrating on making the operations profitable before looking outside the square

B) Disposing of a loss making division, not only injecting $500k into the company but also saving $33k a month on leasing costs.

C) MAking an acquisition very close to home, trying to devlop a strong market presence in its industry and attain a significant market share in Perth/WA before looking abroad. Gives them much more bargainning power when making other acquisitions if it has successfully secured one market.

I have enormous faith in TOX management to deliver the goods. The growth possibilites are endless and Im sure that management will capitalise on all half opportunites given to them to make the company and all its stakeholders winners.

Cheers