A rare 10 and 10, page-3

Hi Plimsol, Thanks for commenting.

I think that a lot of the revenue/profitability comes down to the issue of performance fees. These fees are quite difficult to even guesstimate. But they do appear to be highly elastic to bi-annual fund performance.

Overall fund performance is 2014/15 was exceptional, with the K2 Asian Absolute Return Fund, K2 Select International Absolute Return Fund and K2 Global High Alpha Fund funds each generating over 30% pa returns. I therefore expect the performance fees to be quite high.

The weighted average fund performance in 1H14/15 was 8.8% and the associated performance fees were $9.7m. The average weighted average fund performance in 2H14/15 was 11.2%, considerably higher than the 1H result. I am guessing that 2H performance fees will be considerably higher that 1H - about $18m.

After taking this guesstimate into account, my estimate for full year NPAT is now approx $19.6m (EPS = 8.4c, PE = 9.0) and that the final dividend will be 5c.

All of these deductions are course likely to be way off the mark. But if they are not, this company is value plus.

K