This is indeed an interesting announcement, and I believe a very...

This is indeed an interesting announcement, and I believe a very big one.

Firstly, it was reported in 1H financials that discontinued business had a loss of 9.3m (EBIT loss of 11.0m). One thing from this is that it includes goodwill impairment of 5.2 million, so perhaps this is why the current announcement says legacy business loss is only 4-5 million? It's a little bit unclear.

The more puzzling thing I think is the announcement reports legacy business sales of 20m, whereas the 1H number was 10.6m. This leads me to think that either (1) sales for legacy continued into 2H (perhaps unlikely), or (2) Cabrini purchased more than initially contemplated (although maybe that would have required additional disclosure, unsure). This sales number confuses me, although to be honest, as an investor I couldn't care less about it - I just want it gone and for us to move on!

Third thing - In the 1H financials, around 26.4m of assets was listed as "held for sale" - presuming this is what was sold for 4.5 million. The announcement today discusses a non-cash write-down of approximately $25m. My guess is this is the 20k shortfall on the asset value + the $5m goodwill writedown from 1H financials. Seems fairly transparent.

So - 3 components for profit for the year-end financials:

1) Continuing business profit > expectation at Q3 was EBITDA of 28m (which includes the lease adjustment). My guess is this should still hold, with perhaps interest of 6-6.5 million off the top of that. So best case maybe 22m Profit (assume tax of nil)
2) Discontinued business profit > see above 4-5m loss
3) "Other" (call this costs of getting out of the discontinued business > loss of around 25m.

So - i guess we should expect a book loss for FY19, but a really lofty profit expectation for FY20 (would expect them to say something like 265-270m revenue, and EBITDA of 35m (around 13% of sales) - which is amazingly strong for a business with a 153m market cap right?

The one big kicker here of course (and it was pointed out by others) - is it sounds like the legacy sale included getting rid of 50 employees (although not completely clear). This is potentially a massive win for the longer term (limited redundancies, etc.), and a huge kick-start to the cost downs that we all want to see.

Good luck to holders - I honestly believe this is going to fly in the coming 6 months. Hopefully strategic investors can see beyond the FY19 loss and get on board in a big way!