45%....75%....30%...., page-27

As you say it is too early to take too much from the accounts. Splitting expenses between continuing and discontinued operations could involve a lot of grey stuff and pretty subjective decisions.

In the "all in" 2016 accounts the Gross profit on sales was 13.1%. When the low margin discontinued operations were eliminated one would have expected to see this margin increase. The accounts show it dropping to 12.2% which is close to the 12.1% reported 2017.

Hopefully the higher margin that has been trumpeted on International sales will show up in the half yearly report which is coming up.

Overheads and marketing stayed pretty steady at $1.7m for both years but require a big jump in sales to get to an acceptable percentage.

There was a big jump of 74% ($1.7m to $3.1M ) in operating costs from 2016 to 2017 which came in spite a drop in sales. As a percentage of sales Operating Costs went from 10,3% to 20.5%. This needs to get back to the 3.3% that it was in 2015. Can they do that? I presume the 74% jump might not be permanent and hope its due to the restructuring turmoil period we have been through and that a lot of those costs are not volume sensitive. If sales double year on year for a couple of years we should get the percentage way down.

We have a forecast for break even EBITDA.

Operating costs and overheads were $3.4m in 2016 and $4.8m in 2017 and will increase to some extent with increased sales.

If the strong first quarter growth that we have been told about continues throughout the year then we could see annual sales double to circa $30m

On those sales we would need to see a GP margin above 15% which should be achievable.

A break even EBITDA will put us firmly on the path to profits if sales growth is maintained.

Definitely not yet a sure thing but great possibilities given the foundations that have been laid.