Ann: FY2018 HALF-YEAR RESULTS BRIEFING CALL, page-4

There have been a number of reasons for the lacklustre share price performance. In no particular order, (i) the slow down in sales in WA when the mining boom slowed down (ii) the poor performance of the logistics/storage business and the associated demands for high levels of capital to support it (iii) the regulatory changes around the provision of finance and insurance services.

IMHO AHG has or is in the process of addressing all of these to the extent that they are within management's control - they continue to make earnings' accretive bolt on acquisitions and they are in the process of disposing of the logistics/storage business which will free up a lot of capital (although the ability and willingness of HNA to complete has to be of concern). WA market is said to passed its low point. What is not clear are (a) whether the impact of regulatory changes to finance/insurance services are now fully reflected in the company's earnings and (ii) how much impact rising interest rates will have on the company - higher interest rates will add to the finance costs and act as a deterrent to at least some car buyers.

Lastly, we have to remember that the car industry is highly cyclical although with an upward skew due to a growing population and rising wealth levels over time.

The other positive factor is APE using the creeper rule to increase its stake - it will be interesting to see if they continue doing so.