Ann: Profit Update, page-29

Not that it makes a huge difference, but for my purposes I'm assuming March was closer to $700k than $800k. If we were over $1m with a week to run in Feb, I'm assuming by the end of that month we were circa $1.1m, leaving $0.7m for March. As Vestro said, the $1.8m could be conservative but for now I'm just taking things as they are written.

It will be interesting to see how much of the extra capacity is utilised and how fast that ramp up goes. I note that as at the presentation on the 21st Feb there was 82T of XP Power orders for Mar-Jun in the system, compared to yesterday's update of "close to 100T of outstanding sales orders" for Q4. I'm finding it difficult to try and understand whether or not this is indicating much order growth for the current quarter or not because it seems we are comparing 1 product order volume to total volume. Given the comment in yesterday's announcement that the order volume is "subject to new kilns being commissioned as planned" we can definitely infer some growth. Still though, with 100T over 13 weeks we clearly aren't going to need most of that extra capacity just yet, so I personally won't be looking for a doubling of profit just yet.

At this stage, my Q4 assumption is ~$2.5m-$2.8m ex R&D which is still very solid in my eyes. If there are any updates to the reported Q3 number I'd revise my Q4 expectation by the same percentage. With all that in mind, even at $2.5mil/Q we'd be looking at a forward annualised P/E of only 25 (pre-tax) or so on current price which I'm very comfortable with given the potential growth trajectory in the short and longer term.