Emotions., page-6

Goodaye Parsifal, Pinto, Joewolf and everyone else.

I have shares in a number of coys, each of which is in a very, very similar position to AJX.
Each of the three I am referring to, are in totally different industries.

It's really interesting, because they all now enjoy very similar characteristics to AJX.
I am not attempting to cross-promote - but the message from Chairman below is wholly applicable to AJX situation - it resonates with me, and points to same issues we at AJX are having.

Similarities:
Aust coys
Operating in US
Listed in Aust with bulk of s/h in Aust
New technology, or product.
Trying to break into US mkt
Each with Sales, but mkt waiting breathlessly for proof of real sales momentum.
Each getting SP belted on ASX !!
each with a real viable business potential, once sales are proven
each with need to demonstrate consistent cash flows, and cash flow positivity.

One of these is Yowie Group Ltd (YOW)

YOW just released its A/R, and I have posted an extract of the Chairman's Report, because as I read it, I was immediately reminded of AJX situation.

My point is, it is all a PROCESS !

Each of these coys are going thru same issues.
particularly first para !!

I have chopped most of this. u can read full report on ASX.
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CHAIRMAN’S MESSAGE

Fellow Yowie shareholders,

If Yowie was a brand owned by a multi-national brand confectionery company, it would be lauded for its growth and the investment made towards the next phase of growth. By any measure, sales growth of 51% in a market where competing products launched grew from 6 to 15 and overall confectionary sector growth was only 0.8%, should be regarded as an outstanding result. Unfortunately, the public markets expected more from the Company than it delivered, driven by the Company’s now apparent over-optimistic views of sales in FY2017, resulting in a fall in market capitalisation over the period.

We understand that some shareholders are concerned that we have not been investing our funds more quickly in upweighted marketing initiatives. Our view is that we cannot let marketing get ahead of distribution and vice-versa. Hence, we need to be prudent in the ways in which we deploy the funds which shareholders have provided to us. Some shareholders believe that we should undertake a share buyback to return excess funds to shareholders. This is a capital management strategy that the Board reviews on an ongoing basis but, at present, it believes that it needs to have available all of the cash reserves in the business. There are a range of market opportunities, competitor actions that need to be met and the innovation, IP and product development pipeline need ongoing support.

Growth expectations
We operate in a highly competitive market and believe that the best investment that the Company can make is in product and concept innovation. We It is important to note, however, that we are a small company and any variation in sales plans by our customers or in the timing of new releases will have a significant impact, and that not everything goes according to plan.

Our team
All of the developments outlined above mean nothing unless we get our execution right and this starts with a talented and committed team.

Good talent costs money. This is reflected in the increase in our expense base in both FY2016 and FY2017, and the use of performance rights and service rights to attract our staff to grow their wealth alongside shareholders. The threshold performance levels are designed to ensure that management is rewarded if the Company performs well. I can assure you that your Directors are very focussed on maintaining the relationship between employee reward and company performance.

The future

For a small company such as Yowie, the transition from easy wins that come with a great new product to the ongoing discipline of sales growth, market development and product development, can be challenging and demanding. Many lessons have been learned over a short period. In FY2017, your Company has had a number of successes and situations that we could have executed better. We have learned from those situations and your Board believes that your Company is positioned for strong growth in FY2018.

Your Board and executive need your support through the votes that you are asked to cast at our Annual General Meeting to allow the Company to have share market stability so that it can concentrate on producing great results and strong growth to create shareholder value. While the Company’s share price performance over the last year has been very disappointing, at current prices, your Board firmly believes that there is a significant disconnect between market capitalisation and Yowie’s inherent value. Each of your Directors have backed this view by acquiring more shares in the last few weeks. We now look forward to receiving your support to allow us to continue the job of building a great brand and a great company which will contribute towards a better alignment of share price with inherent value.