Ann: Dividend/Distribution - REF, page-29

Ok, after reading the small notes properly, and re-doing my numbers, here's what I get:

In FY16 the contact lense business was generating annual revenues of about $1.5 m. In the H1 period of FY17, annual revenues of about $0.87 m (^) were acquired (acquisition of Net Contacts). In the H1 period of FY18, annual revenues of $1.2 m (+) were acquired (acquisition of WebContacts and YourContacts). So pro-forma, and absent any organic growth, the business should now be generating annual revenues of $1.5m + $0.88m + $1.2m = $3.58m.

Fast forward to the H2 FY18 period, and annual revenue (in online contacts retailing) was reported at $4.5m. The reported H1 FY18 revenue was $2.0m, meaning H2 FY18 revenues were $2.5m, which crudely annualises to 2 x $2.5m = $5.0m.

That actually doesn't look too bad. Apologies again, if I alarmed anyone.

But for me, current price does not adequately compensate for the level of uncertainty in this business (uncertainty in how much can yet be extracted from the legacy business, and uncertainty in when contacts business can be expected to become cash flow positive, and when the group will be sustainably cash flow positive and to what degree).







Footnotes:
(^)
Referring to Dec 16 half year accounts, in particular 'business combination' notes :
(a) Group revenues had acquisition been made 1 July 16 = $3.2 m
(b) Actual reported group revenues = $3.09m
(c) Duration of reporting period for which acquisition was held = 4.5 months ~ 75% of period

6-monthly revenues acquired ~ (a - b)/(1 - c) = $0.437 m ; annual revenues ~ $0.87 m (very approximately and ignoring any seasonal effects)

(+)
Referring to Dec 17 half year accounts, in particular 'business combination' notes :
(a) Group revenues had acquisition been made 1 July 17 = $4.0 m
(b) Actual reported group revenues = $3.83m
(c) Duration of reporting period for which acquisition was held = 4.25 months ~ 71% of period

6-monthly revenues acquired ~ (a - b)/(1 - c) = $0.597 m ; annual revenues ~ $1.2 m (very approximately and ignoring any seasonal effects)