Ann: Secures $2.1 Million Performance Marketing Contract, page-12

Yes while on the surface it appears to be a good announcement it leaves out the most important aspect of what that announcement should provide which is not only increased revenue but does not state anything about increasing profits, because as we so often find at ANN that we get surprises like increased costs which many times does not result in higher profits. This is a performance contract which will only result in increased revenue if it achieves the required results for the customer. Now lets say this contract starts to perform poorly using the intended cost structures will there not be pressure to turn it into a loss leader so it might entice others into a similar deal? By that I mean sometimes we need to spend more to get results which can be hidden easily in large organisations so that we can entice new customers who may become profitable anyway.

I did not like the announcement because it was sloppy rather than informative and because we are so used to reading such sloppy announcements which fulfil ASX rules we sometimes jump to the wrong conclusions because we are not fully informed, just less than 50% informed imo. We wont know if that contract will be profitable this year or next because so little information has been provided. Sure the market has reacted positively but imo the market has jumped to the wrong conclusion possibly if it relied on the announcement alone. MBE still appears to be a good long term buy at some unknown price point I might add, but not on this announcement imo. .