annual report, page-3

While I agree with you that the debt is too large, I think that the brutal hard times of the high dollar are now over and will have a bigger impact than you are assuming.

For arguments sake AVG will export $150 million worth of wine next calendar year. At 13% forex benefit that is $19.5 million that would flow right to the bottom line assuming constant price (which we will not see because they will cut prices somewhat to increase volumes and competitiveness)

Again, I am not saying that they will get the full benefit of the forex changes. Of course it will be much lower and a fraction of the above number but where we end up is up to each investor's individual forecast. I think they can keep 4% of the 13% which is just my ballpark guess/hope and is probably high. That's $6 million extra that would flow to the bottom line.

Even if I am high, which you argue that I am, it just shows what a cash flow machine this company can become as the dollar stays low or goes even lower.

I think management is being conservative and setting themselves up for an underpromise/overachieve scenario as where the dollar trades at is really up in the air and uncertain.

Maybe I am way off. But maybe the dollar keeps dropping over the next year or two also. The flow through to the bottom line is (potentially) enormous. These are early days in this and those last results are rear view mirror looking.

Also, they mentioned that they are looking to do something about capital management which does sound like maybe selling off another vinyard like you suggest.

I just initiated a position for these reasons a month ago and bought more after the earning release. Those numbers cover the time period when the dollar was super high and I was expecting something close to break even not $7 mill profit.

I would rather that they would have forgone the dividend and kept that cash but they do have franking credits and maybe it makes sense to use them.