analysis of top 20 changes & conclusions, page-35

Report as at 31 July 2010

Name No. %
1. NATIONAL NOMINEES LIMITED 140,082,381 11.47
2. MR JAMES MICHAEL O'DWYER 57,011,770 4.67
3. MR ANDREW WINSTON DOYLE 35,223,012 2.88
4. ANZ NOMINEES LIMITED 28,634,596 2.34
5. TRAVIS REDDY + ELINA REDDY 27,900,794 2.28
6. CITICORP NOMINEES PTY LIMITED 26,298,629 2.15
7. O'DWYER INVESTMENTS PTY LTD 23,687,184 1.94
8. MRS VIRGINIA WARNECKE 15,028,577 1.23
9. MR GORDON MENZIES WILSON 12,025,695 0.98
10. MALCO (PNG) LIMITED 10,204,081 0.84
11. DELPHI SYSTEMS PTY LTD 9,060,194 0.74
12. MR TIN SHEUNG LAU 8,600,000 0.70
13. MR DAVID JONATHAN GREGORY 7,200,000 0.59
14. MR PETER BICEVSKIS 7,000,000 0.57
15. MR ROBERT WILSON 6,612,767 0.54
16. COMBINED VISION PTY LTD 6,450,512 0.53
17. MR STEPHEN PERROTT 6,000,000 0.49
18. MR GRAHAM BUGDEN 5,771,570 0.47
19. MR PAUL JEREMY HAY 5,385,743 0.44
20. MR PHILIP GLENN BAILEY 5,239,308 0.43
TOTAL 443,416,813 36.28

Report as at June 30 2010

Rank Name No. %
1. ANZ NOMINEES LIMITED 109,023,055 9.14
2. NATIONAL NOMINEES LIMITED 69,326,159 5.81
3. MR JAMES MICHAEL O'DWYER 57,011,770 4.78
4. MR ANDREW WINSTON DOYLE 36,147,874 3.03
5. TRAVIS REDDY + ELINA REDDY 27,900,794 2.34
6. CITICORP NOMINEES PTY LIMITED 26,298,629 2.20
7. O'DWYER INVESTMENTS PTY LTD 23,687,184 1.98
8. MRS VIRGINIA WARNECKE 15,028,577 1.26
9. MR GORDON MENZIES WILSON 12,025,695 1.01
10. MALCO (PNG) LIMITED 10,204,081 0.86
11. DELPHI SYSTEMS PTY LTD 9,060,194 0.76
12. MR TIN SHEUNG LAU 8,600,000 0.72
13. MR DAVID JONATHAN GREGORY 7,200,000 0.60
14. MR PETER BICEVSKIS 7,000,000 0.59
15. MR ROBERT WILSON 6,612,767 0.55
16. COMBINED VISION PTY LTD 6,450,512 0.54
17. MR STEPHEN PERROTT 6,000,000 0.50
18. MR GRAHAM BUGDEN 5,771,570 0.48
19. RECONIA PTY LTD 5,037,062 0.42
20. MR GEORGE MIALKOWSKI 5,000,000 0.42
TOTAL 453,385,923 37.99

Comments:

ANZ + Nat nominees combined 168716977 down 10mil from 178349214
MOD : Unchanged
AW Doyle down 924k
T&E Reddy : unchanged
Citicorp nominees : unchanged
V Warnecke: Unchanged
G M Wilson: Unchanged
Malco (PNG): Unchanged
Delphi Sys: unchanged
T S Lau : unchanged
D J Gregory : Unchanged
P Bicevskis : Unchanged
R Wilson: Unchanged
Combined Vision: Unchanged
S Perrot: Unchanged
G Bugden: Unchanged
P J Hay: New in list 5,385,743
P G Bailey: New in list 5,239,308

Out of list
Reconia (5,037,062)
G Mialkowski (5mil)

Comments:

Non institutional larger holders hanging in there.
Large selling that took place would likely be mainly the nominee accounts which are presumably holding for many of the recent issues under the share issue schemes. AW Doyle has had a lot of cheap shares, presumably trading/selling some.

Outlook (opinion only)

Non instutional holders will continue to hang on. Still a lot of scope for holding the price down by inst. holders who can still get cheap issues if these continue. However, perhaps the days of these "emergency" issues are approaching their end due to
a) new rights issue if all taken up
b) prospects of more sales actually generating sufficient income to fund most day to day activities
c) Options for .015 might be taken up in large numbers if the sp can get up and hold signifacntly above .015 in the medium term. I expect the board is very much hoping that this is the case. (me too!).

Rights issue

This is a chance for smaller holders to average down now plus take significant advantage of a future rise in the sp by the 3/1 options. It will be interesting to see if the inst. holders take up their rights and options. If they do the issue will likely be fully subscribed and my guess is that the sp will trend upwards fairly quickly. If not and the issue is significantly undersubscribed, the company may still have to keep issuing shares under the line of credit agreement at low prices and the big guys will likely try to keep it that way for a while (as has been the case).

The decision to take up the rights issue:

It's still a gamble. If the rights issue is not well subscribed, it's going to take another good announcment or two to get the sp to hold above the issue price of .01. It's probably a bit late to sell a percentage of your shares to fund the rights issue now without some cost - there's a lot of sellers at .009, but if you can afford to take it up from other cash sources it may be worth the punt to take up the issue and wait it out. I have decided that I will be taking up my rights issue ( a not insignificant amount) in order to get the options. Imo, .015+ should be very achievable if they can get a few more orders like the png one. Even if the sp can hold above .01 you won't lose as you can sell the shares for what you paid or more. Worst case is probably a 20%-30% loss if you sell out at .008 or .007 and keep the options. This would make the cost of your options to be 3 options for .002 or .003 and you then wait for the sp price to consistently get something over .016 to take them up - you've got 3 years.

Here's hoping it will be a successful rights issue!