New Lows, page-2

Hi Spider even with the current negative sentiment around declining revenues I never would have anticipated a market capitalisation at this level. It is in the realm of companies that are carrying heavy debt and making huge operating losses and just hanging on. Corum is far from this description with no debt a strong balance sheet and expected to return to more profitable operations next financial year.

Corum's share price must be a moderate worry to Bill Paterson by now. He has seen is equity position fall by up to 80% over the last 5 years. This is not his only investment that has nose-dived either. From being up there in BRW's rich list his fortune has likely taken a huge hit also. Generally company boards and management try and ignore their share price if they believe in their business plan going forward but when the Chairman holds over 50% he must be looking for his management team to execute the new model of profitability at current revenue levels in a timely manner. The problem with illiquid small caps is that the share price can fall on very small trading volumes at a time when there is a lack of positive news.

With the stabilisation of the customer base the uptake of Corum's new products is critical to improving cash flow in the next financial year but pricing in the current market is not going to produce anything but modest growth. Obviously the key to higher growth rates still relies on the long awaited "specific opportunities" for future growth of which the market is to be informed at an "appropriate time". The current share price doesn't put Corum in a great position from an equity perspective in any deal with other parties but this belies the still enviable balance sheet for a small cap software company.

Following the loss of the Chemist Warehouse business, out of interest I have been following the implementation of their own developed dispensary software. My intelligence source tell me it is very basic compared with Corum's but is fit for purposes currently. It potentially has weaknesses in areas of backup and recovery, security and capabilities for enhancement in the emerging E-HEALTH connectivity space.