$6m EV for a business that will also retain the royalty for the...

$6m EV for a business that will also retain the royalty for the Zoleo subscribers we already have. We don’t sell those - unless there is an acceptable offer.

It’s interesting doing the numbers. The best comp year is FY23. Sales of $39.6m in that year. That will be lower going forward. In that year GP margins were 28%. That’s lower because of Zoleo. For some context, GP margins were 44% in FY20. Let’s work with 35% which is reasonable once Zoleo goes imo.

If I say revenue of $28m that’s gross profit of $9.8m using 35%. Other opex ex D&A was around $7.5m in FY23. The business says there’s $2.5m in cost out but I’ll use $1.5m to be conservative and because of inflation. $9.8m less $6m in cost is $3.8m EBITDA.

Depreciation drops to potentially zero, there’s tax losses and finance costs are immaterial so the pass through to NPAT is pretty good. Call it $3m NPAT.

So the business is on a FY26 PE <3x BEFORE any payments by RP. Cashflow should be good if we’re not spending on capex. If the directors implemented a 50% payout ratio that’s a 1.7c dividend.

For that reason and perhaps I’m being a bit naive but the price action looks overdone. I have a bid in the stack.

I would encourage holders to attend the AGM and push to shape this strategy. I have met with other large holders and there is appetite for this. If that happens we should see capital AND income growth from here. It will also restore confidence in the business which is shot.