Thanks for the Summary, Captainblood. It's a great review. To...

Thanks for the Summary, Captainblood. It's a great review. To reflect on Brickwall's comments, the effect of dilution and earnings per share capacity is generally being overlooked within conversations either for or against. It's the fundamental measure of intrinsic value and performance indicator to encourage new investors.

A new investor post this rights issue is not going to be delving so much into these details now. What he will look for is the current P/e ratio to invest or not...If it is to high will need good reason to invest while if its to low and the intrinsic value is there you may have a new investor. This should have institutional appeal...The more shares the lower the earnings capacity per share.

Earnings per share (EPS) is crucial because it indicates a company's profitability on an earnings per-share basis, providing insight into its financial health and potential for growth. Investors use EPS to assess a company's performance and compare it to other firms in the same industry. Additionally, EPS influences stock prices and can impact investment decisions. In essence, the higher amount of shares on issue reduces the appeal to potential investors by a P/e value.

From back-of-the-envelope calculations, every share on the issue today would give around 4 cents earning capacity for each Aus$100 million in free cash margins. At a P/e of 7.5 cents, it equates to a 30-cent share price.

If options are to be added, not only does the earnings capacity per share drop back but so does the share price...

From back-of-the-envelope calculations, every share on issue today would give around 3.5 cents earning capacity for each Aus$100 million in free cash margins. At a P/e of 7.5 cents, it equates to a 26-cent share price for the same free cash margins.

Regards Croc