Ann: Market Update, page-18

I was a bit off here in terms of the NPAT percentage of EBITDA. With debt reduced, naturally finance costs will decrease and improve cash profits as a percentage of EBITDA. So that 57% figure I used based on the normalised accounts (H1 17') will be a lot higher this FY. The interest rate on the Mega Bank facility is about 7% however, if you work out finance costs as a percentage of total borrowings it has been about a 12% cost based on the last couple of reporting periods. Correct me if I am wrong there but that is what I came up with.

DNA are on track with the 6 instalment terms of the USD100m facility with USD10, USD15 and USD17.5m having been paid so far (3 of 6). This leaves 2 more instalments for H1 18' and H2 18' totaling USD27.5m, followed by the USD30m balloon payment (30% of the facility) in July 18' H1 19'. I assume this as it is the 3 year mark for the facility given the funds were payed in July 15' to the Star Vegas vendors from the facililty.

Given the cash situation and the management fee non longer an expense, it seems likely that this balloon payment will be able to be made without the re-finance option being taken, and that the business will be debt free, excluding the USD20m working capital facility, at the begining of FY19.

With limited finance costs (working capital facility), a tax rate of around 5%, A5.5m corporate costs, A5-6m Depreciation and Amortisation, and excluding any non-reccuring costs the percentage of NPAT to EBITDA will likely be in the region of 85%+.

An FY19 bullish scenario may be:

After flat earnings growth in FY18 due to management transition and unused capacity for junkets, Star Vegas achieves 10% EBITDA growth in FY19 after the property is increasingly utilised to it's full potential via junkets and general gaming market market.

10% on USD61m = USD67.1m FY19 EBITDA

On the back of significant growth at Aristo from the mass market strategies in FY17 the property continues to grow at 10% per annum in FY18 and FY19 on the back of mass market strategies and general gaming market growth.

At 10% growth x 2 years = USD13.07m

Property level EBITDA USD80.17m

Exchanging to AUD100.38m

Less corporate costs of A5.5m = A94.88m Group EBITDA

NPAT at 85% of EBITDA = A80.65m

A80.65m / 831.2 shares = .097c EPS

Some food for thought.