Ann: Trading Halt, page-47

Could you please clarify regarding the capitalisation of IT expenses? As far as I am aware this is fully disclosed in note 8 of the FY18 financial statements. What exactly are VGI alleging CTD have done that is not above board in respect of this?

To me there is nothing earth shattering about the points raised by VGI particularly regarding the capitalisation of expenses which are fully disclosed in note 8 of the financial statements, although i will caveat this by saying i have not read the report my conclusions have mainly come from what i have read in the media and the response provided by CTD.

However at $30+ CTD was clearly overvalued, if I take the top end of FY19 EBITDA guidance as $150m  and if i understand managements commentary that $20m of development costs will capitalised and add these back FY19F EBITDA is ~$130m is effectively a multiple of some 16x EBITDA which appears a hefty price to pay. 

I have no doubt however they key to determining how hefty that price is comes down to understanding the company's organic growth profile which is a time exhaustive exercise given the number of acquisitions made over the journey and one I have yet to decide if I will undertake.