Ann: Investor presentation, page-14

My rough calculouson the transaction is as follows:

After deducting fortransaction costs and debt repayment, we get an implied enterprise value forthe remaining business of c. $12.5 million.

From there, thequestion is: what is the maintainable earnings of the hampers business? Perannouncements, it did $6.5 million EBIT in FY22 and $2.4 million EBIT in FY23.On historical numbers it looks verycheap, but it was likely a major COVID/work from home beneficiary so difficultto say whether those earnings are repeatable going forward.

Theboard has stated it is optimistic on the outlook for HWB and has been investingin strengthening the business with a focus on building the requiredinfrastructure to scale. This indicates that even if the business remainsprofitable, we won't be seeing any dividends in the near terms as excess cashwill be re-invested back into the business.

Additionally, anybenefits HWB had from the combined Pental Group will now cease, such ascentralised admin and sales functions etc so I am assuming the remainingbusiness will have a higher cost base going forward.

It's difficult todifferentiate yourself in the hampers business without significant distributioninfrastructure and relationships with F&B groups, so I can't see a clearcompetitive advantage that this business would have that would enable it to earna higher sustainable return on capital than its peers. Contrast this toPental's Consumer Products Business which had a high degree of brand permeationand was stocked in all major supermarkets.

Overall, it's toohard for me to make a call on the outlook for HWB so insufficient margin ofsafety and will probably sit this one out. Would be interested to hearcompeting views.

GLTAH