Ann: Half Yearly Report highlights, page-19

Hi Nihilism,

In response to the performance shares it seems as though they have issued these on a pro rata basis. It is better doing it this way rather than having a huge expense once they achieve the $25m cumulative revenue, much like depreciation really, it's spread over a period to smooth things out.

As for the bad debt, I have no idea how that jumped. My thought is that they have had this for a while but only now are they impairing it.

The top line figure I agree with you, it's exceptional. The 10% net margins are good and hopefully we can see that fatten up, I would like to see 12.5-15%.

I do like the fact they are using a debt factoring facility because this is a company who needs a lot of cash due to their payment terms. If some major advertiser comes through and does a huge push for a fortnight, we would want tmp cashed up and ready and willing to take on the work. If their cash balance is low (I rekon they should always have $3m minimum on hand) then they may not take on the full amount of work that is being pushed. This doubtful debt has been accounted for now so anything that comes back is a bonus.

On the valuation perspective, it's roughly $35m market cap, extremely cheap imo. take out those two non cash expenses (bad debt and share payment) and we have a nice $1.5ish profit for the half year. I struggle to find a market cap like that with this profit. Now it's up to the company to fix their minor mistakes as you've pointed out and drive that revenue home.