Ann: Growth Agenda Delivering Results - Appendix , page-2

re: Ann: Growth Agenda Delivering Results - A... Market likes the 4C and so do I.

Month of June recorded a normalised EBITDA of >$0.5m (once you add back the one-off expenses of $200k disclosed in the 4C). This is an annualised EBITDA of $6m. At say 7x earnings, you get $42m less $5.6m debt (from April preso) and you get Equity Cap of $36.4m (or 2.5c per share using fully diluted shares of 1.437B). If earnings quickly move to upper end of guidance of $9m EBITDA, market cap becomes 4c per share. So seems like some good upside from here.

If the growth looks like it is appearing and we get to 8x EBITDA multiple, then the price per the above calc becomes 4.6c.

It looks like the June revenues were not boosted by one-off end of year hardware sales, which suggested the quality of June EBITDA was good.

The benefits of 1 HR and financial reporting system should also deliver strong synergies and better business information.

I think the market was looking for validation on the previous projections, and this has now been provided. I reckon the next quarter should see a strong performance which will lock-in the EBITDA forecast, which should see price around 4c (I hope).

It will be interesting to see what kind of business updated they provide with the annual accounts, or whether we will need to wait until Sep Qtr 4C for a better picture of FY11.

For all those people against HTC (really against the former Mobi) you must remember that this is a totally different business than in the past, so please let bygones be bygones and don't distract from the current business.

Regards
Marv

DISC: I hold