Ann: Green Forest Acquisition, page-13

Call me a sceptic, but I dunno how this will be received. Like most ann's it'll probably gap up initially, but the proof will be in the pudding to see if it holds.

On the face of it, it looks great, but I have queries... namely the following:

Financials
- Dec 2017 half, 25.1m sales & NPBT almost $2m
- Year Ended June 2017, 24.7m sales & NPBT of 790k

On the face of it, that growth looks amazing - i.e. effectively doubling sales & profit

BUT... then why the following:

Terms of Acquisition / Bonus

Net Profit Before Interest & Tax for Full Year 2019




Questions:
- Why are the earn-out / bonus payment hurdles so low? I mean they generated "almost $2m NPBT" in the 6 months to 31-Dec 2017 & the earn-out table has a max hurdle of only $1.8m for FY2019 ??

I just don't get it...

Do they expect the 2nd half of 2018 to be negative by way of profitability?

If the 2nd half of 2018 replicates the first half, there should be almost $4m of NPBT in FY2018

So why is the maximum earn-out hurdle for FY2019 only $1.8m NPBT...?

This isn't a downramp - it is a legitimate question...