Ann: Appendix 4D and Half Year Report, page-37

Ignoring the shorter paranoia, goading and baiting above, and actually looking at the figures, this is a result a little on the upside surprise to me, via expenses having been kept well in check. Obviously longer term shareholders have to a degree a bona-fide axe to grind with management, but they've undeniably restrained expenses whilst continuing the revenue growth.

Whilst good value in the past I would have disputed it as one of the most under-valued stocks on the ASX (sorry @TheAnalyst007) personally, but one has at least raise an eyebrow at a sub $600 million cap valuation with near $220 million shareholder equity on the balance sheet and near $200 million of that in cash, coupled with its revenue, earnings, cash flows and various other business performance parameters.

Half yearly revenues at $35.6 million and on course for $75 million full year if the 10% growth maintained. Combined with the cost discipline (the whittling of commercial applications/pathways showing up in accounts not just rhetoric) at near +50% profit growth to pre-tax $22 million. That's chunky.
Sure 10% revenue growth isn't shooting out the lights, but revenue and profit growth have been pretty steady per their chart, which would normally inspire investor confidence and the expense restraint might reasonably create $45 million full year profits - which again belies, coupled with the strong balance sheet, a sub $600 million valuation in a clear - if modest - and consistent, growth story:


The pipeline of ambitions in applications have been sensibly honed in and present no obvious untypical regulatory or execution risks - please feel free to correct (with decent evidence backed opinion, not just shouting loudly). The pursued share of TAM's not unambitious, but not unusually or unrealistically so. I personally suspect the PhotoCosmetics potential far larger, once they have sustained and widespread success in Porphyria and Vitiligo markets, but lets stick with their modest guidance.

The fall in share award expenses is really assuring. The management are evidently reigning in both past cost excesses and similar over-indulgence at the award trough. I get the hang-over of disgruntled shareholders who bought in far higher and watched management overindulgence, expense and ambition weigh on the value of their investments, and selling therein. But more recent shorting I do not. Decent margins, consistent profitability and growth, reigned in expenses, diversifying initial successful commercial lines to not fanciful and not dissimilar applications for future growth. I don't get it. Looking at past broker reports I get revenue growth a little under expectations, but that does not warrant such a lower valuation IMO. Competition is slim on the horizon in EPP: Vitiligo largely presents an unmet need; IP protection at least a half decade.

If there are so many nefarious shorters and manipulators on these threads (for the short obsessive - the vast majority of sellers are shareholders, NOT shorters), perhaps some can give us a coherent explanation of the low valuation of this company, SPECIFICALLY in light of these earnings and indeed the 'sell it' investment thesis? Past shorting activity on this company (as I have shown before, much taken off at profit) I understand and clearly vindicated investment tact - it is a valid investment, apologies to the pitch fork crowd. More recently placed short positions (at lower stock levels) however, rather than being nervous of, I personally am perplexed by and increasingly even emboldened (possible short squeeze) by.