Azure Healthcare Revisited, page-3

Hi GLA,

Thank you - It is a very quiet thread, but I would expect that if the thread was active, then the SP would be considerably higher.

Yes, I did focus on a revenue comparison (versus EBIT) as this was an easier metric to communicate. Some of the peer group capitalises Research & Development (AZV expenses R&D) and they reside in different jurisdictions with different accounting standards (eg GAAP versus AABS).

In essence the re-structuring process entailed closing down Perth based manufacturing and shifting across to Dallas, USA manufacturing. The difference is cost base is substantial - it the order of $AUD28 / hour (fully loaded costs) versus closer to $USD12 / hours (full loaded). However, this triggered substantial redundancy costs and parallel of production lines, resulting in an interruption of supply lines over this time period - virtually impossible to shift manufacturing from one country to another with causing a level of delays. Understanding this process, I waited until the transition was complete, but prior to the full cost benefits to trickle down to the bottom line - hence the timing of my investment.

Additionally, the company divested a non-core asset (CellGuard), which generated a decrease in revenues as a result, but enabled the company to focus on its core, healthcare interests. A prudent decision, but resulted in a loss of revenue from this segment.

I have every confidence with the re-structuring (having done exactly the same process in my own electronics business in 2007, which operating in an identical market segment). I have known the business for 30 years, so I have a pretty good understanding of the segment

I would expect that in FY19, the Company will likely get back to a 15%-18% EBITDA, in line with its peer group.

The company has a history of not communicating to shareholders particularly well, however I suspect that the board would be hesitant to spend funds on Investor Relations until such time as the transition was complete, all the one-off costs incurred and written off, to provide a clean slate moving forward.