Ann: Trading Halt, page-13

The proposed purchase of ACWE and capital raise doesn't seem like a good deal to me.

1) Go to Court Lawyers ACWE's annual revenue is around $3.1m however there is $3.8m of debtors and WIP. The debtor and WIP balance is 122% of sales. This indicates a problem with the billing and debtor collections part of the business. How much of this balance can be collected and how much will need to be written off?

2) The purchase price is in the range of $3m to $3.75m. Which is similar to the debtor balance ?

3) The deal seems like a good deal for Armstrong and a bad deal AFL

4) Raising capital for only $3m will be extremely expensive with all legal fees etc.

5) AFL has not shown a good history of integrating acquisitions.

Overall I don't see that this is a good deal for AFL and the shareholders.

I would much rather see strong organic growth.