focus valuation part 2 - acquisition, page-16

Adjustment made - impacts EPS figures. I thought shares outstanding was linked but clearly wasn't.

Reposted... (thanks for the correction!)

Optimistic: forecast business value rises from $0.14 to $0.48
Mid-line: forecast business value rises from $0.14 to $0.34
High cost: forecast business value rises from $0.14 to $0.15


This looks like a very attractive investment decision made by Focus - as long as costs can be controlled!

Under a high cost scenario, this will likely add no value and be a risky venture.

I will only support this on the basis that they are able to control cost - I do not wish to invest in a high cost producer with cost of production any higher than already experienced by Focus.

The business models for Laverton and Summit are based on a forecast cost of production lower than Focus. As long as Focus has done it's homework and can integrate these additional production lines in to the existing business with good cost control, I believe that it will prove to be a fantastic acquisition. This will be the key factor.