Ann: Response Regarding Product Date Extensions, page-16

Arguably the failures of the current management team are even greater than the previous management team. The current management team had ample opportunity to raise capital when the share price was around $2.50. This was after the bad press had started, their debt issues had become apparent and they were realeasing announcements regarding debt in December 2017. Had they done this they could have issued 50-75m shares at $2.00 and raised 100-150m. Wouldn't have resolved all their problems but at least it would have taken pressure off the balance sheet.

Instead they gambled with shareholders funds that either they could trade their way out of their problems or that the share price would rise and they could do a capital raising at a higher price. If their reason was the former it just shows how inadequate a grasp they had on the issues within the company. If it was the latter then it just shows management to be using poor judgement since nobody can guarantee the movement of share prices.

Secondly their drip feeding of writedowns is also a sign of poor management. New management has one opportunity do write downs and blame it on management and then focus on moving forward. Also you can only blame the performance of the business on previous management for so long before people just stop believing the excuses.

Third the constant changing of reporting formats seems like a way to obscure the results and make comparisons harder. Say what you will about the last management team, at least they kept the reporting formats virtually unchanged over 5 years. This made doing comparisons with the separate brands much easier.

E.g. the chart below, up until H1FY18 they used to break down outlet numbers based on brand. Then they combined Donut King, Brumbys and Micheles into one group which in my opinion was to hide the rapid declines of Brumbys and Micheles compared with Donut King which by comparison was fairly stable. Now they have pulled out the International numbers which gives a better idea about domestic performance however now makes it impossible to tell how the individual brands are performing overseas.



Fourth, people keep pointing out that the success will come from the international segment, but given that most of the profitability of these will flow through to the master license holders you have to question how this can ever make up for dwindling domestic network. Not to mention that the number of international outlets is actually declining at a faster pace than the domestic network.

Finally you really have to question the future viability of the business given in the recent half there was a total of 1 new domestic outlet! Several posters have consistently noted that it is only the unprofitable stores closing down however if you look at another franchise in dominos the vast majority of new stores are opened by existing franchisees or management. Given this were are all the new outlet openings being done by the so called profitable franchisees?