Ann: Correction to Market Update 25 January 2019, page-17

I had a brief email chat with Tony from EGP on yesterday's announcement before the second release.

He said he isn't concerned with the downgrade in sales guidance. He is more focused on the NPAT. This is before the second release. I'm sure his views has changed after the second release.

In regards to the fundamentals, this isn't a true moaty business which Tony agreed when I pointed that out to him. Utility retailers have nothing because regulators and consumers control the market.

With that said, this is more of "small cap to mid cap" play given the size of the market.

"Given how tiny they are and the enormous size of the market they operate in, I suspect they can reinvest at good rates of return for at least the next few years, but you’re right it’s not a true ‘moat’ business" - Tony

For valuation, Click Energy was acquired for close to 0.5 sales. At guidance of $32m, LPE is trading at 1x sales with the recent guidance. Of course, DYOR because this is just a simplistic valuation that doesn't factor in LPE's higher margins, higher risks with LPE being a company with shorter track record, etc.