Ann: Appendix 4D & Interim Financial Report 31 December 2017, page-40

@Autosime

Interesting link. Thanks.

Yes, if the value of the surplus real estate is as indicated here, and it can be realised, it is indeed material. I certainly do not dismiss that out of hand. At the back of my mind is the fact that the Tas Paper ops ceased a good number of years ago, but the properties remain largely (or entirely?) unsold. There may be good reason to be believe that value here can be realised soon, or soonish - I don't know.

The problem is, for me, that policy prevents me from lending too much weight to something unless I can attach a high degree of certainty to it. It's a policy that means I will often miss out on opportunities, but that has also protected me from too many big mistakes.

I am less enamoured by the comments about a 40% rise in y-o-y underlying earnings in H1 FY18. The bulk of the gains were driven by a rise in gross-profit in the Australian operations. No doubt progress seems to have been made here. However, what has to be remembered is that these operations have such razor-thin margins, that it takes only a small increase in gross-profit, with no increase in operating costs, to result in a large gain at the bottom line. It is very important, I feel, to realise that a small amount of seasonality at the revenue line, results in a massive amount of margin fluctuation at the EBIT line (because margins are so thin). As such, H1 tends to have fatter (or should I say, less skinny) margins than H2.

So as far as I can tell, the gains in H1 were a result of gross-margin improvement in the domestic operations, whilst containing operating expenses. This, I suspect, are the benefits of the price rises seen across the industry.

So the full year results (which will encapsulate the skinnier H2 margins) will give a better indication of what sort of earninsg gains are being achieved. I expect these to be good - but I don't expect them to match the 40% gain seen in H1.

Going forward, however, there is the question of whether price rises by the merchants can continue to outpace price rises by the supplier, and pressure on operating expense.

Now a question for you:
If your investment philososphy is that "the likes of me and you" cannot match the prowess of professional investors, then surely you don't think that the most value you can extract from those professional investors is to take the few freebies they are happy to dole out. Surely better than to subscribe to a "trickle down" investment approach, you would be better served by making full use of their services, rather than going it alone.