Interesting initial reaction from the market this morning. Seems...

Interesting initial reaction from the market this morning. Seems like it was unsure at first but finding good support now that investors have had time to digest it.

Personally I see the Acquisition & Paris Creek update as a net positive. A few initial takeaways:

- Another acquisition of a Cash Flow / Earnings positive business, one that is growing at a much faster rate than Paris Creek (Earnings growth of 87% vs Paris Creek’s 3% over the same 16-17 period).

- In terms of earnings alone, a much cheaper acquisition than Paris Creek ($11.25 paid for each dollar of FY17 earnings vs $18.07 paid for each dollar of Paris Creek’s FY17 earnings).

- Obviously at a very different stage to Paris Creek. St David consderably smaller (Rev $4.5m vs Rev $18.6m FY17) with limited potential through improved branding (already very sharp in this area). Paris Creek on the other hand much larger with more untapped potential in terms of branding / marketing, etc.

- Important to note that while there are a lot of quality cafes in Melbourne using their Milk, there’s a lot more that aren’t yet, leaving plenty of room for further growth. Also a lot of room for growth outside of Vic if Management want to pursue this.

- Pleasing to see key management of St David staying on board, with part of the consideration in escrowed shares.

- Good update on Paris Creek. Sounds like a lot of Investment has gone into it, particularly on the branding / marketing side, with a launch of updated products imminent.

Just my thoughts. Keen to hear other’s views.