Firsova: I am not sure that the same parties will want back in ,...

Firsova: I am not sure that the same parties will want back in , nor am I of the opinion that we really want the same parties back in. I think that the company is undervalued simply because it sold its shares to the wrong parties and via the wrong processes and if I may say management need to do things that are friendly to shareholders so that the share price reflects the opportunity. I must say that Explorers never have a problem with selling the opportunity and if they are mispriced its because something hasn't been able to be said rather than something left to the imagination.

I think that broking firms and players that take commission who are also fund raisers are fickle its the churn that gets them return on investment not long term returns but short term. I think players like CCZ and Bell Potter are all in the same category - They will sell the story but really in my opinion they wont really be committed to the company - they are brokers first. The raising fee is the goal and clients don't have cash to take up the next one if its tied up in long term stock investments.

That issue I do have with management - they have done this twice and on both occasions it has not kept the share price momentum it has in fact over time destroyed value as too many shares are put back into the market. I commend them for raising the funds but in effect someone else has had to purchase the shares when they have been dumped - sp is really only what a willing buyer will pay and they get less willing when the sellers are queueing at the exits. I have a group of Investors I am involved with PGC is my dog at the moment. I am underwater and have an average price around 28c in one company and 25c in another. These after the first purchase was 19.5c. Its now heading for two years and touching 30c wont cut it for me.

Management say that managing the business is their job and the share price is what it is but I know at the time of the last raising it was raised with them about how the shares were allocated and they were limiting allocations and could have raised much more - in reality the selection process must have been flawed - they did not get long term investors and by getting short term players they have destroyed value for all investors - management have to wear that in my opinion. This is the second problem - they need to learn from this.

Actually I think management are responsible for an incorrectly priced share. Its either because they are not credible - too many overpromise and under deliver or have a bad record from somewhere else. Or they have not told the story effectively. I think its a combination of both.

Imran Khan - I have not seen or located actual presentations or documentation to that effect. I have seen the 2010 acquisition presentations and I can see where they would draw those conclusions - Seeking to consolidate a very fragmented industry and do it with smaller players and increase the multiple by buying at 3 or 4 PE's and then having the whole business re rated at upwards of 12 to 14. Not easy but doable - I think it lacked two components of understanding -

1. The GFC would have a longer impact and that smaller fragmented industries were struggling to make headway given the GFC. No-one wants to sell their business when they cannot get a good price for it.

2. Their capital structure was not ideal - expensive notes and bank finance always going to be difficult to purchase without a cash pile and then add insult to injury a bad half year that put them back in the hole - No good issuing undervalued shares to do deals and then taking away potential share price growth as well.

No doubt this past half year has hurt but they have not changed their forecast so I expect them to be pretty close - even though I suspect it depends on shipping and the customer wanting it now or in the new year. Lumpy businesses are always difficult to get the timing sorted.

I have reviewed all of that and have a high regard for management. they manage the business very well in my opinion - they just need to get the right people to attract the right investors. Or in the alternative they could just keep delivering good results and make a few smaller but good acquisitions with the cash they have.

As regards a falling AUD - all are in the same boat.
As government has outlined the absolute spend on medical increases each year by about 3 times inflation and only reduces in year 4 to twice current inflation.
The growing number of older Australians will keep filling the pot up.

I think it will all come together but right now shareholders are hurting. I will keep investing at this point.