Ann: Appendix 4D and Half-Year Financial Report, page-2

Although there was a headline loss of $600k, the China and Australia businesses were actually profitable at an underlying level. Important to note the following:
- $150k in "Share based payments" were expensed entirely in the half (to Directors as per their AGM), so it won't re-occur in the 2nd half.
- $618k in "Consultancy costs" is largely associated with Triple C (corporate activities and capital raisings).
- $77k payment for the termination of a JV (one-off)
- $153k payment for intangible assets (one-off)

So these total ~$1mn and are non-recurring, in which case we actually have a profitable company if you look at it properly, on an underlying and operating basis ($400k). In light of the aggressive marketing spend in Q2 (they spent more on Advertising and Marketing in Q2 than the previous 5 quarters combined), its fair to say that this is setting up very well for the 2nd half and FY17...also worth noting that with considerable "carried forward tax losses" and no debt, a significant chunk of future revenue will drop to the bottom line (i.e. no interest or tax lines in the P&L)

As for the collection of receivables, no bad debt provision as expected and collection is expected over the "2nd half of the financial year" (i.e. this quarter and next,, in keeping with their 2 quarter lag).

Those worried about receivables will continue to be so until the end of April when the quarterly cashflow statement is released. I'm more focused on a company that has front-end loaded expenses and one-offs and what that will mean for the 2nd half and FY17.