2007 earnings forecast, page-5

LZ,

They would not buy anything which was not positive to earnings, you can be sure of that.

As far as trimming costs goes and in particular labour costs, there have been vague references to cost savings within operations, but I would not imagine there is really any fat in this area. Perhaps through improved automation and data processing there are some savings still to be made.

The board has an unfortunate habit of dressing up and dressing down numbers to suit themselves, the forecast was another example. The board has done an about face on amortisation of past deferred expenses, saying this was a charge relating to expenses in past years so should be considered as an abnormal amount. This after booking huge charges against profit in 2004/5 with no such qualification.

The goal was to pump up the 2006 "underlying profit" result, so the percentages of growth for 2007 are not as large (Only 19% profit growth from 2.96cps to 3.5cps). Reading between the lines, I think the company may be looking at placing shares, to fund an acquisition they are looking at making. It would be easier to do this around the market price, while the market price remains good value.

Hence the conservative growth numbers, and the recent positive announcements being slipped out well after market closing time (disclosure, but not designed to alert people enough to want to buy the staock), as well as the expanded bank finance which gives them access to an additional 3M.

Regards,

Barry.