Kev, when you look at things closely, elementary errors keep on...

Kev, when you look at things closely, elementary errors keep on repeating, as if its amateur hour. Over in TAU for instance, they can’t even get it right in order to convene an EGM (ongoing since 31/10/16). Their original prospectus did not included, for example, an independent expert’s /accountants report, etc. Now, it’s not likely that the EGM will be held much before May (or later still).

The problem with all this, so far as AHF is concerned, is that Michael will undoubtedly concentrate on TAU, first, second and third, before even remotely turning his attention to AHF. After all, the strategic directions review was originally announced /referenced at July’s EGM. Now, some 8+ months later, we’re still waiting for it, but given that it is competing for attention with TAU’s own EGM, it will likely end up being deferred even further out in time. More however has been said about this on the TAU thread at ==> Post #:23733345.

This of course is very strange indeed for a company where the admin /corporate costs are now >$2.5M (annualised) after taking account of the Q2 and Q3 ramp up in cash admin costs to $340K per quarter, and then adding on to this the somewhat dubious (especially as to timing, etc) P&L play so far as the expensing of options are concerned.

That said, the cash admin costs alone, where annualised to $1.36M broadly represents a 5.5%+ revenue cost assuming annualised revenue of $25M+.

With TAU’s ability to keep on paying out on employ /other and KMP costs sort of reaching its zenith, the corresponding pull on AHF’s resources appears to have been ramped up. This is especially so given that even in Oct16 (according to the AGM16 Presentation), Admin costs for Oct16 were circa $50K which is a far cry from the $340K that Q2 ended up with.

Looking at this further, the coincidence seems to have been choppy waters being encountered over in TAU, so therefore, take on more of the smooth sailing over in AHF. Yet, even if so, and despite the heavily ramped up admin costs that have now occurred (ie: $290K in Nov /Dec16 + $340K projected for Q3 = $630K in 5 months), AHF has largely been ignored, it’s interests sidelined, and its strategic directions review all but stalled.

Indeed, even basic, elementary matters such as getting the business humming along, getting the various JV’s in place or under way, addressing announcements from other ASX listed companies, or indeed in getting the board and its business right, have all seemingly gone by the wayside, all while the TAU distractions have continued.

Yet, if AHF is not getting any results, then just what is it getting for the near on $2.5M annualised in admin costs that it is either now paying or expensing via the P&L? If not improved value, then why the added costs?

Quite aside from all the confusing, conflicted and quite distracting messages of last year’s myriad of Presentation releases, there is something that is a little bit more pointed, a tad more direct, and far more certain and yet even this continues to be messed up, whilst lurching from one presentation to another, like a drunken, forgetful sailor.

Sales may very well change or shift base over time, but production budgets should not. What we have for AHF however is a minor shifting of the sands so whilst of minimal variance value, it’s the inconsistency of message that is actually more worrying, as if the school stock picking competition crew are in charge.

Sometimes, just sometimes, it is the tiniest of pieces of information that actually points to a lack of effective control, direction or management in place and it is to this that the argument of failure in shareholder comms, investor relations, corporate governance and board independence all go.

So, what is this big issue that is seemingly small and minor whilst at the same time, big and major? It all has to do with the forecast /budgeted milk production for F17 and all the inconsistent messages that are being (and have been) shown here. Allow me to illustrate:

ASX Presentation è 8/2/16
The Presentation stated that the F17 estimated annual milk production would be 16,500,000 litres.

ASX Presentation è 29/7/16
The Presentation stated the following:

• “FY 2017 (sic) ram milk production forecast of 16m litres.”

ASX Presentation è 25/11/16
The Presentation stated the following:

• “Milk production volumes are achieving production forecasts – 5M litres in FY17.”

ASX Appendix 4c Commentary è 31/1/17
The Q2 Cashflow commentary stated the following:
This result is slightly above YTD budget and is in line with the budgeted production of 16.1million litres for the full 2017 financial year”.

H17 Report è 28/2/17
In the review of Operations, the following was stated:

• “Below are the production figures for this half-year compared with the same period in 2015. The result is slightly above year to date budget and is in line with the budgeted production of 1 million litres for the 2017 financial year.”

So, 12 months ago, it was 16.5ML. By late Jul16 however, it had dropped to 16ML, before then increasing back up to 16.5ML by late Nov16. Yet by C16 end, it was back down to 16.1ML which figure (and exact copy statement) they repeated in the H17 report. In many respects, it’s a question of whether the production budget at various crucial time shad been either misplace, forgotten about or ignored. I’m not certain which, but given the near on annualised $2.5M in admin costs (both cash and non-cash, but all P&L related), one would expect a far more polished outcome than this. So, if they can’t get this right, consistent or maintained, what else are they also slipping up with?