Q wins his slab of Carona, page-16

Hi Qqqq

First, congrats on yr win.Read on financial news today, Corona sales have soared 5 %. Longshot made his contribution to that.

Looking at yr proposed next wager, think you need to review your basis to something better aligned with the exit run rate from FY 2017. If you extract the tax benefit from the previous year ( $ 861720 ) and apply the actual tax payable on FY 17 performance ( $ 220 688 ), says actual NPAT is only $ 513 K. Using this number, eps is only 0.11 c per share.

I think that you will agree that when situations are this close to being a loss, highly likely there would have been some creative accounting.

I did not comment at the time, as I no longer hold MBE, but IMO the balance sheet is also a bit borderline. How they convinced the auditors to support a goodwill number of $4m for Clipp amazes me. They project growth of 64% for FY18 and 71% for 2019. Clipp was barely EBITA positive in FY17. They then also report ' the Board has determined that Clipp is non core and does not fit with the future direction anf focus of MBE'.

They have created an opportunity to review the goodwill number by saying ' provisional fair values are subject to final review of the Directors'. Plug in a number of $2m and the balance sheet looks sick.

And finally, lets not forget the revenue number for FY 2017 carried a component of DCB, what is left for FY 2018 and what is a reasonable run rate entering this year. Really hope Neil & Co turn this around but IMO, still fragile and certainly not headwind free.

All considered, as you are already in front, I would lure Longshot in for another slab of Corona using 0.4 cents EPS for FY 2018. I believe he will be doing another transfer come August next year.

Have a good weekend.

Rokewa