"In our previous market update dated 31st March 2014 we notified the market that the Company had received two Expressions of Interest for the Madman business. Our First Half Results released on the same date reflected a write-down of the carrying value of the Madman business to a value reflective of its fair value. The sale process is still progressing and we expect it to complete in the near future. We will inform the market as soon as we are in a position to do so.
The March market update also emphasised the importance of a successful US launch of Chill Factor in order to meet its forecast second half profit improvement. The performance of the US launch can only be fully assessed once we have the final trade sales figures for May. We plan to provide the market with a full update following this assessment."
The first paragraph seems OK to me. They've stated that they expect the transaction to complete, and that will have a cash positive effect. But what does Captain Subtext have to say about the second paragraph? My read is that US sales (in fact probably all sales) have been lower than touted. If the market accepts that Madman will go through, my guess is that's what's driving the price down.
Question is how bad will it be? Give up and go home time, or just disappointing ... again!
FUN Price at posting:
8.2¢ Sentiment: None Disclosure: Held
