News: PGH Pact Group Says HY Underlying EBITDA A$137.0 Million, page-2

To Trickspen

Your point1. It is indeed confusing. I think what they mean is that at the revenue line they have included 5 months worth of revenue from Crates in this period (versus 6 months in prior year). They didn’t include December’s revenue as Crates was deconsolidated on 30 Nov. Likewise future results will not consolidate Crates’ revenue as it is only a 50% JV, but they will include 50% of profit. BUT both the underlying ebitda and underlying ebit contain 5 months of PGH’s 100% ownership of Crates and then 1 month of 50% profit. The one month (i.e. December) contribution to profit is reduced from 100% to 50%; what these figures don’t show, because they are before the line for interest expenses, is that the interest bill for December (and in future) will reduce considerably because of the large cash inflow from the asset sale. Hence the total group profit after interest and tax for the 6 months (to be published on 15 Feb.) after financing cost should rise by much more than the $2.9M variance at the ebit level (excluding the one off capital gains tax). Moreover they say “ Pact implemented $20 million in cost savings in the first quarter of FY24 and forecasts that these cost savings (amongst other things) will offset the loss of the earnings from the sale of the Crates Business in the second half of FY24”

(2) You are right. Yesterday’s substantial shareholder notice showed that Kin had increased by only 0.66% in the 6 weeks from 28 December to 2 February. That is TINY. It is one thing for Kin to try to scare holdouts with the figure of 85% (and NOT mention that it has acquired only 0.66% in 6 weeks): it is bad that the IBC also peddles the same one-sided info. As you rightly said “The IBC letter is well drafted in the sense that theycould not be reprimanded by any regulatory body as they would argue they arejust outlining the risks to shareholders based on the uptake of the offer todate. However it is abundantly clear they are just acting in the best interestsof RG and hoping uninformed shareholders sell out cheap”.

(3) IBC state they areunaware of Manipur Nominees intentions. That is a curious comment. I canonly surmise that the IBC has not asked Manipur. I wonder why? Of course it’s up to Manipur whether it wants to say anything either to the IBC or in public. IBC has used bland legalistic words “not aware of”. That could either mean Manipur has refused to disclose its intentions, or IBC just hasn’t asked. If the former is true, IBC could easily have said “Manipur has declined to express its intentions”.

5 – 6 weeks delay. I agreewith your comments. At present Kin has only 6 days before the bid expires.Given the current lack of momentum, both on and off market, I doubt that therewill be a sudden surge of off market acceptances in the next 6 days. Given the market price, I doubt that Kin will be able to acquire 5+% on market (at 84c) in this period.