Ann: Full Year Statutory Accounts , page-8

Fatstocks

I did one and had a working model I shared about 10 months ago. The reason I have not updated it is the confusion surrounding the following key attributes:

1. GP was stated not to be materially different. That said we have never actually had a period during which we could see the GP on the new business model as these agreements dont actually show when the income is flowing in. So I cannot do anything other than use between 30% and say 35% as a composite.

2. The turnover growth some have read it to be per each reporting period and 60% increases over a whole year get you to somewhere in the range of $10m and 60% compounded each half year would get you much closer to $15m. Personally I think $10m is a stretch and good one.

3. They have added layers of management into sales effort but also took out old under-performing functions during the first half of this last year. With so much change its been difficult to get a handle on actual spend going forward.

I need to really take the AFS apart but without those critical factors I have a working model with too many holes in it. If it was only 1 I would have a stab but 3 and maybe a whole lot more smaller issues I decided not to update it other than to look at whether the break-even or better was sustainable. I dont mind taking a punt but I dont like people needing more money and diluting the share.

My view and why I am in this stock is just that it shouldn't need more cash unless it has very good news and at break-even or better I can afford to wait.