Ann: CBD not to proceed with acquisition of Neigh, page-10

re: Ann: CBD not to proceed with acquisition ... In theory, yes, anybody can recreate Neighbourhood. As could the previous ceo.

Why would you? I thought CBD were trying to preserve the cash burned by a growing REC inventory.

Has CBD suddenly decided that it can't sell one of the electricity industry products (RECs) so therefore it is going to invest in a new retailer - energy trading, compliance and risk systems, a billing and CRM system (Jackgreen paid over 500k for theirs) and enough people to run a new company for residential customer acquisition...

OK, how many new retailers have been successfully started since the changes in Customer Welfare Regulations in Vic in 2004?

No, Red, Vic, Momentum and Neighborhood all predated these changes. Several have had name changes (Vic, Simply).

Correct - none.

How much cash have APK burned before they got to Op Cash positive? Correct - they are negative at the op level. 270,000 customers at end FY11 Operating Cash level - negative $26m for $199m receipts (FY11 Q4 App 4C). Receipts (FY12 Q1 App 4C) $90m 1Qtr 2012 and still $4m negative. As are Vic/Lumo as disclosed in Infratil accounts.

CBD may be better off solving the underlying problem rather than starting up a whole new one.

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