My answer to your question comes from a post that hottuna contributed. VTG reported about $103m at 2016 half year in commission fees on TLS presumed sales (see below) and when you do the cuts to this revenue as indicated in the press release (assuming they eventuate), you wipe over $30m from the revenue side by year 2020. Then if there aren't commensurate drops in cost of goods sold (because the costs are relatively fixed, think rent/labour) then this $30m impact moves straight through the income statement and pretty much wipes out the reported operating profit as shown in this half year statement.
VTG Price at posting:
90.0¢ Sentiment: Hold Disclosure: Held
