Ann: International and interstate store expansion, page-3

Guys, would this deal dilute the existing shares a bit? They settle a large part of the deal by shares to be escrowed for 12 months. They did not mention the dilution to existing shareholders' holdings. While this deal expands the revenue but I have some misgivings. In the last financial report they mentioned the figures of income and while it was not very clearly stated, I see that the rents and staff cost were clearly higher than the profit from the stores. That means even if we take the investment charges out, they still have a small loss just running the shops and pay rents and all staff costs (including the corporate staff salaries). Physical store expansion is not likely bringing in the profit. The deal certainly avoid spending too much cash (to the choice of setting up brand new stores) but it dilutes the existing shares and create a potential of selling shares after escrow.

This action seems to be neutral and the little pop this morning seems to be losing steam just like many before it. I think AU8 will head down under 20c again in the next few weeks. I want to come back a buy a little but it is probably a good idea to wait until it gets down to around 18c .