new business opportunities, page-6

Mookie, I read through the annual report and the investor presentation again. Couple of things I can't get a handle on. Maybe you can help.

At June 30 07 they had $1 million in the bank and annual revenue of $300,000. Ordinarily that would be cause for concern. However, since then we have exponential cumulative sales revenue growth of $3.5 million to November, running now at $800,000 per month. Assuming another good six months to June 08, at about $1 million or so per month, gives a total of $10-12 million from Component Homes for 07-08, which is dramatic from a standing start. The graph in the investor presentation shows full capacity revenue at $1.5 million per month, without adding the extra shift, for annualised revenues of $18 million if full capacity is reached and maintained month on month. The other graph "forecasts" a net profit before tax of $7.4 million, but gives no timeline.

The question is, when is the $7.4 million profit to be achieved? And from where? Is it this financial year from a combination of Component Homes and the Indian door JV which is up and running? Or solely from the domestic operations of Component Homes in Australia? If the latter, and given that the header to the graph says this profit is achieved on existing operating capacity, then presumably this is all from Component Homes. How do you get $7.4 million profit from $10-12 million revenue? Or are they talking next year at full capacity on $18million?

If so, then what is the forecast for this year? You mentioned a figure of $4 million. Where was that stated and is this the forecast for the 07-08 FY? Any clarification would be good. Bearing in mind that they stated in the Annual Report that expansion will require further capital/equity raising. Be interested to hear your thoughts. Thanks.