Hi folksArticle re BRT in the Australian today. No mention of...

Hi folks

Article re BRT in the Australian today. No mention of the marshmallow acqusition though, but they still rate it a speculative buy!!

http://www.theaustralian.news.com.au/story/0,25197,23029458-23634,00.html

Brainytoys (BRT) 17.5c

Tim Blue | January 10, 2008
WANDERING amid the detritus of Christmas, Criterion was struck again by how much money gets spent on toys at this time and began to wonder how he might claw back some with a timely investment in a local maker.

As it happens, there really is only one - Brainytoys, based in Perth. The company thinks up, makes and distributes games and toys based on famous cartoon, book or movie characters, such as Thomas the Tank Engine, The Wiggles and Dreamworks' Bee Movie film.

Buying a licence to use these characters costs an upfront royalty and then a regular share of revenue, but comes with a degree of exclusivity for a fixed period, according to RM Research analyst Dennis Trlin.

While it is not yet making a profit, Brainytoys' share price shot up on a deal to sell Wiggles-branded toys in North America.

Jim Henson, the man behind the Muppets, handled the deal and has been central to the rise of the brand and its $150 million earnings over the past three years.

Last October, Brainytoys bought Reveal, a North American supplier of games, books and educational toys, and in the next few weeks will complete the $2.47 million purchase of Enertec, a Hong Kong toy distributor, product vendor and manufacturing agent.

It has acquired the licence for the Hummer brand of toys - the Tonka toy for the US Army - and agreed to buy British toy maker UKC for $840,000 in cash and scrip. More interesting, though, is the appointment a few weeks ago of a non-executive director, Larry Bernstein, formerly president of Hasbro Toys, a $US3 billion ($3.4 billion) company that is the second-biggest toy maker in the world.

Trlin expects the company to become cashflow positive in 2008, on maiden sales of $15million for the calendar year. "The Bernstein appointment is a major plus," he says.

"I suspect it helped the company become the master licensee for a significant US brand that it has talked of recently, which has big sales potential if it goes ahead."

All matters considered, Criterion rates Brainytoys a speculative buy.