Ann: Appendix 4D and Half-Year Financial Report, page-20

Based on the share price since earnings, it appears that the market did not like it and continues to be quite negative

Positives:
- they sold 10.5% less than 1H23 and 7.5% less than 2H23, but margins improved significantly despite FX rates against the USD falling
- Gross profit was only ~2% lower than 2H23 despite lower sales and weaker FX so less discounting seems to be working
- the Dunlop deal seems to have been missed altogether; the share price fell from ~88c in mid Nov when they announced that Goodyear was doing a strategic review and it was not clear what would happen with the Dunlop distribution deal, and although mgmt. have not clarified the issue, everything points to things moving forward as planned with Dunlop.......taking on staff, using their warehouse and doing the distribution of ~$80-90m of tyres per year which is ~20% increase in top line and even if the gross margins are lower, the cost of doing business are not going to increase significantly (i.e. leveraging their warehouse space, distribution channels and staff)......surely this should add 5-10m to the bottom line once fully operational (although perhaps higher working capital costs at these higher interest rates)

Negatives:
- CODB has ticked up and 2H23 seems much lower than the 2 preceding 6 month periods (2H22 80.8m, 1H23 82.2m, 2H23 78.1m, 1H24 81.1m....although have not adjusted for depn, amortisation, etc)....inflation?
- they are going to have to carry a further 10 staff from Dunlop so further increases
- they are going to need additional working capital and finance costs are going to tick higher

On balance, not a great result, but I thought the margin improvement (so not fighting for discount tyre sales), the Dunlop confirmation and ongoing issues with Beaurepairs (less competition) would have steadied the price in the 60c, but clearly not......lot of sellers (at least for this name) under 55c so it is going to be some time before anything changes (well mgmt will have to deliver results frankly)