finch, I've been meaning to make a new post re the video...

finch, I've been meaning to make a new post re the video business as I think I was overly bearish in my above post. Having reviewed what I said, the way I can work things out is that the locksmith business and videos were to be sold for $20.6m together. Then the locksmith business was sold for $13.1m, and I am going to assume that the ICAC issue meant the conditions precedent for videos could not be met. Even though each component earned $25m revenue, the locksmiths was valued at 2/3 and videos @ 1/3. So, the video systems part could be said to have been valued at the time by the suitor, at $7.5m. But no deal was made, so hard to know what videos is worth now.

We'll know the NTA soon for the final parts (videos/security) of the business from QTG's next report, and the suitor based their takeover on the last NTA. So, maybe $1.5m of the receivables facility has already been used (from the AGM presentation ANN), we can add market cap of $1.76m + $1.5m and get a total of $3.26m debt and equity currently. If we assume that all $3.4m debt will be used over time (unless QTG management get their act together), that's $3.4m + $1.76m = $5.16m. But debt possibility is not what the market values on, as we know- just debt used.

QTG was running at a hefty discount to NTA when the offer was made, because it was a 13% premium to NTA, but a massive premium (130%) to the then share price. I don't know if we can then assume that QTG videos will be at such a share price discount to NTA forthcoming. Seriously, it has very little to fall now- it's almost free! With still the same amount of revenue as locks- some $25m- it will be interesting to see if it was videos causing so many of the expenses/capital intensiveness, or if it was locks. We'll soon find out.

QTG is going to be one of the shares on the ASX most easy to value when the new report comes in. I am not sure if ICAC has been completely settled or if there will be any penalties there, or the nature of those. It still has the "support" of Helmsman and GE Finance, and debt not due until September 2013, but covenants relevant.

Not too much to fall now, one would think. At these penny levels, each fall results in a massive market cap drop. Any potential suitor would be watching at these prices. It's an interesting one, finch!