Ann: Preliminary Final Report, page-6

I was slightly disappointed with their EBITDA margin performance. Was hoping it was going to track towards 16% pre corp costs management have been saying is achievable. On continuing ops it was around 12.5% from what I can see and enjoyed some margin expansion benefit from the Elton business which operated at 20% margins. Although only slight as only for a quarter and on 5M revenue. It was also a fairly messy result. Bigger picture still looks ok. I jumped on the call and this is my bigger picture view. Management said non Aqura revenue expected in the range of 125M. Still targeting 15 to 17% pre corporate EBITDA margin. At the mid point of 16% thats 20M EBITDA. Corporate costs guided to 3 to 3.5M up 10 to 20% from FY18. Suggestion was that earnings of Aqura will cover corporate costs. So post corporate costs thats 20M EBITDA. I am assuminn 3.5M in depreciation and 1.5M in interest costs. I think its fair to ignore the amortization as thats non cash and purely acquisition related (non recurring). At a full tax rate I get 10.5M NPATA or around EPS(A) of 3 cents per share for FY19. At $.215 I have it trading on a PE of 7 X and EV/EBIT of 4.7. I think thats undervalued and if those numbers are delivered should trade north of 30 cents. I do think FY19 is a make or break year though. If they cant deliver a clean set of results and show that they can achieve 16% margins (at least) then I think ill be moving on.