The thing is that they should have foreseen these costs when they agreed to purchase these businesses. And thus these should have been factored into the purchase prices of those businesses which clearly they weren't (i.e. St Davids, Paris Creek and now more of Maggie Beer).
What's the bet that in a year or so they say they need capital to R&D and marketing for Maggie Beer?? And they want to pay 10-11x EBITDA as it is currently?? Just ridiculous. These industries are capital intensive and marketing spend heavy with risks around whether it will pay off. I think people are seriously underestimating the risk-reward/pay-off in each scenario. When you pay these kind of multiples the downside is far more prominent.
LON Price at posting:
23.5¢ Sentiment: None Disclosure: Not Held
