With due respect you appear to be comparing apples with pears....

With due respect you appear to be comparing apples with pears.

The Cash Flows from Operating Activities for the 1st half of 2018 was $3.4 million. That is the result from receipts from customers less payments to Suppliers and employees, Interest and other costs of finance paid and income tax paid. This figure is basically how the company is operating - substantially worse than previous periods.

The company, appears to have included in the operating expenses an amount of approximately $6.8million that relates to the acquisition and restructuring costs related to the Hudson acquisition. The amount is not able to be determined from the financials produced. In addition, it seems to be a slick accounting move. If it were not included (in total) then the cash flows from operations would increase to $10.2million. Note that this is still a substantial reduction from the corresponding 2017 period's figure of $31.4 million.

The company's CASH position is affected by matters relating to, among other things, working capital items and their movement.

You will note: substantial write offs of:
- trade receivables of $16.6 million - means that a number of franchisees or like are unable or unwilling to pay amounts due. Not a good sign
- inventory of $5.1 million - poor purchasing/unsuitable or stale products in the supply chain or with franchisees? Indicative that management did not have their eyes on the ball.
- write down of property plant and equipment $12.8 million. Does this mean that the plant and equipment is old and inefficient? If so what are the costs to modernise and what are the benefits?
- provisions for onerous leases and make good obligations $17.5 million. This is an accounting entry that lessens the tax obligations of the company. Importantly, it foretells that there will be substantial cash costs on the leases and make good obligations that the company will have to make.

In short, the figures indicate that the company is having problems all over the place and in particular with its franchisees (inventory and receivables write offs) and also the lease obligations which will have to be addressed.

This is at a time when the balance sheet has as its main asset 'Intangibles' being $583 million out of total assets of $838 million, poor cash flow from operations and the banks having imposed significant obligations on the company.

In short, the company does not appear to have the cash flow generating capacity to reduce the reworked bank obligations, it is unlikely to get alternative debt funding (either the quantum to pay out the existing lenders or at a reasonable price.

It is also likely that the company will require significant funds to modernise its plant and equipment and carry out its development plans.

Given the above, one can reasonably expect an equity offering of a significant level. The questions are: at what price and what quantum.