is anyone holding these?, page-4

Finally got around to having a closer look at this one and at the result.

Interesting that they paid $10.1m for the 70% stake in Marbletrends on listing in Nov 2007, but current market cap - for essentially the same business - is now $4.6m at 7.4cps. Actually, that is getting close to the $4.4m that the 30% minority interest is valued at on the balance sheet.

Anyway, that aside, still need to allow for how that minority interest plays out. Seems like the call option has expired - and was never exercisable, since the share price needed to be above 25cps. The vendor put option doesn't kick in for another 3 years. So really down to what they can negotiate... probably vendor reluctant to take payment as 26m shares at this price, even if EBIT is a bit lower than forecasts.

I suspect they'll hope to get agreement with a mix of cash and shares to the vendor for the remainder. Allowing for another 30m shares issued might at least enable some normalised ratios.

Overall, report was pretty good - slightly ahead of May forecasts and with positive outlook. Div as per expectations. IF they could get back to achieving prospectus forecast levels of revenue ($41.7m) and EBIT ($3.4m), then this should amount to profits of around $2.0-$2.2m. However, obviously a lot of risk around making optimistic assessments like that at this point...

Overall, I think odds of sp doubling within 12-24 months are higher than the odds of halving. It is possible a few may find their way into my "pick-and-punt" portfolio of tenbagger wannabes. :)