Ann: RPM Delivers Growth and Margin Expansion, page-9

Hello. Yes, the important indicator is the EPS. I am hoping again for 2+ cents EPS this financial year. Scale is a factor. The company must be of large enough scale, such as being attractive for a takeover. Keep in mind, in the past, the company was seriously overvalued. Now it is undervalued. I sent the email below recently.

To: [email protected]
Subject: Continental AG's Australian Operations & Investments

Dear Continental AG

I read on the internet Continental AG owns the Australian automotiveoperations called ‘My Car’, which were purchased from the Australian publiccompany Westfarmers for $350 million; for a reported 9.7 times EBITDA.

There is another, small, public company on the Australian Stock Exchangecalled The RPM Group (RPM), here: https://rpmgroup.net.au/and here: https://www.asx.com.au/markets/company/rpm

Last financial year, ended 30 June 2023, RPM earned underlying EBITDA ofAUD$10.6m and an underlying net profit after tax of around AUD$3.75mrepresented by underlying EPS of 2.17 cents based on weighted average number of ordinary shares used in the calculation172,736,315. https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02705934-2A1470876?access_token=83ff96335c2d45a094df02a206a39ff4

Currently RPM has 195,448,061 shares onissue and is trading at 9 cents per share, therefore trading with a marketcapitalisation of AUS$17.6m or around 1.66 times FY23 EBITDA.

The problem with the market valuation ofRPM is RPM has acquired a number of automotive tyre business using cash &shares/script deals, resulting in the vendors of these acquisitions sellingtheir shares on the stock market despite the RPM shares having very lowliquidity on the stock market. This has placed very strong downward pressure onthe share price, falling from an overvalued exuberant high of 47 cents to arecent low of 7 cents.

Today, RPM issued an earnings guidance,here: https://announcements.asx.com.au/asxpdf/20231109/pdf/05x4bfvzfr15qh.pdf. In the past, the various earnings guidance of RPM have been very reliable.Todays earnings guidance highlighted a forecast underlying EBITDA of AUD $10.5mto $12m, improved/reduced inventory levels and therefore improved positive cash(which suffered in recent years due to the over purchasing of inventory due toCovid-19 supply issues).

I am a shareholder of RPM.

Possibly Continental AG would considering making atakeover offer for RPM.

Thank you