Ann: Market Update, page-14

Good thoughts on the risks.

Had some thoughts on PE and it actually is in the 10-12 bracket.

As it stands USD 61m from Star Vegas + USD 10.8m EBITDA from Aristo = USD 71.8m

Minus the USD 20.5m manangement fee = USD51.3m Group Ebitda

Converting to AUD63.7m EBITDA

Normalised NPAT (excluding non-recurring costs) at half year was about 57% of EBITDA figure.

So, AUD63.7m x .57 = AUD36.3m

AUD36.3m / 831.2m shares on issue = .043c FY17 EPS

.53c share price / .043c EPS = 12.32 FY17 Trailing PE

Looking forward, and you mention the debt repayments which is a good point but lets just look at earnings multiple.

At 5% growth at Aristo EBITDA would be = USD11.34m

I disagree with your assumptions for Star Vegas. Star is trickier because of the transition, but I think a good conservative assumption would be reducing Q1 by 50% and then assume it performs as if FY17 from then on. So, essentially saying this is a lost year of growth for the property then less the Q1 transition.

(Note: the main floor won't really be affected and FY17 had the death of the Thai King thrown in there which subdued players.)

So, broadly speaking reducing FY17 result by half of one quarter - USD61m - 12.5% or 1/8 = USD53.375m

Total Group FY18 EBITDA USD 53.375m + USD11.34m = USD64.715m

At current AUD exchange rate = AUD80.4m Approx.

At FY17 half year normalised result NPAT ratio to EBITDA (would likely increase as less debt and interest in FY18) .

AUD80.4m x .57 = AUD45.828m NPAT

AUD45.828m / 831.2m shares on issue = .0551c EPS

.53c share price / .0551 EPS = 9.61 forward PE

At 10 to 12 PE share price range would be 55c to 66c respectively.