Ann: 2016 AGM Presentation, page-127

"It's subscription based, so from an ethical standpoint, I'd suggest subscribing (for free) and finding out for yourself. Generally speaking, there's an overview of the AGM and investor day - including the facility visit."

I actually think that it is a reasonably balanced article (well, as balanced as someone who is positively pre-disposed to the stock can be) and contains a good deal of detail which, based on my understanding of things, is accurate.

A reasonable section of the articles is aimed at the lack of market savvy-ness on the part of management, and in the ham-fisted manner it communicated the trading update to the market. Such criticism may be valid, but apart from that aspect, the report also provides some good industry context and undertakes what I thought was an excellent dissection of the drivers of the company's profitability.

The most striking thing, to my way of thinking, is that the author "finds" several items that amount to around $1.2m, which explain the variance between the forecast DY16 NPAT (of $2.0m to $2.5m) and the underlying result. Pleasingly, from my vantage point, one reason cited for the weaker-than-expected DH16 is some $0.3m for additional marketing purposes.

In percentage terms, a $1.3m of potential adjustments means that management's guidance is under-stated by a whopping 50%-65% (!).

Of course, that $1.2m figure is derived by throwing even the kitchen sink at the upside scenario, which is obviously not prudent, but even if one took a far less libertarian reconciliation than that conducted by Capital H Research [*], one would still get a more representative, underlying profit number that is well above the expected figure put forth by management.

And that, I think, is the author's beef: that management has been a bit negligent by presenting things in the worst possible light.

Personally, I don't care too much about that (it has provided me the opportunity to buy shares in the exact same business, but at a materially lower price than it was a few weeks ago).

But I can sympathise with the author's frustration on the part of investors who don't have the time or the ability to drill down into the subtle - but critical - nuances of underlying profits vs "management-guided" profits.

In summary, I think the article will add a lot of value to all followers of the stock, be they newcomers to the business, or more seasoned followers of the company.

It is recommended reading, for sure.


[*] I don't understand the Capital H business model. Where, I wonder, is the upside is for Capital H for laying the fruits of its intellectual grunt out for all to see... free, gratis and for no consideration?