Ann: Annual Report to shareholders-MLA.AX, page-4

Hi Pittwater,  good to see you're still hanging around here too!

here's my 2 cents...

Top-20:
Interesting Top-20 movements, still very tightly held. Confirmed my thoughts that Delk's original parcel of 1.467m was bought up by Walker co. The recent on-market turnover in Jul/Aug was likely resulting from several of the original medivet placement holders selling their stakes notably: Adistem Ltd (possibly 916k shares) & DB Genetics (750k worth)

- Net top 25 increased 1% YoY to 85.5%
- Available float outside the top25 is only 19.8m shares now
- # of MLA holders decreased from 622 to 591
- 295 holders hold less than a marketable parcel of $444 AUD
- Surprisingly former CEO Mark Donnison only sold 100k shares during the FY

Sales:
- 11.5%  (approx $1.4m) of the companies revenue is attributable to one customer, vs 12% in 2015. I thought this might be higher personally, especially given the size of some of the contracts. IMO there is huge potential here to grow the relationships further, and develop significant repeat business, primarily in the Tuta space.
- Projected Revenue growth rate of 11% for Tuta & 39% for Clements, illustrates the turnaround and new range of suction pumps (and additions of the Ardo  line) to the product lineup, this should drive good growth I think.
- Receivables impairment has reduced from 130k in 2015 to 84k this year which is a step in the right direction, and resulted in bad and doubtful debts of $35k being expensed this year. Given the relative credit worthiness in the industry of hospitals/medical providers (Govt backing etc), I'd hope this could reduce even further/ be eliminated going forward.

Other/Expenses:

- As previously noted by other posters (sorry!) employee numbers decreased from 27 to 24 (as at 30 Jun 2016) likely Medivet related reduction, and partially offset by increased MLA sales-force IMO.
- Staff recruitment costs/ training expense of 56k (would consider most of this a one off as previous years expense was $0).
- Consultancy fees/costs increased from 255k to 429k this year. It would be interesting to know the proportion of one-off fees attributable to the divestment of medivet/realigning the business etc. Even reducing this back to previous years levels would add almost 200k to MLA's bottom line.
- Office/Lab Supplies increased from 34k to 61k, potentially a portion of this could be due to the establishment of new employees work stations etc, and may be one-offs.
- MLA still holds 100% holding in Medivet Holdings Australia & Medivet Laboratory Services.
- Accumulated losses have nearly hit $20m.
- Tuta COGS (as % of income) projections for 2015: 2016-19 of 49% , 2016: 2017-21 of 58%
- Clements COGS (as % of income) projections for 2015: 2017-20 of 63% , 2016: 2017 47%, 2018 55%



All in all fairly solid, with the Medivet fiasco behind us, there is now plenty potential there in both sales growth and expense reduction to generate in excess of 1mill profit this FY, I'm quietly confident this will be a great year for all of us long term holders.


All in IMO, DYOR etc...