Hadndoe, while I do like your positivity, I dont think your...

Hadndoe, while I do like your positivity, I dont think your actually reading the market updates correctly.

The original forecast at the half year report was $34 to 36 Million. They only made just short of 10mil in profit (9.8mil) apparently for the first half of they year. But hey, we are going to double that in the 2nd half. Cause sure. However remember that of that 10mil in profit, if you read page 9 of the half year financials, is that they didn't collect 11.5 Mil of that profit - it was all paper profits on uncollected performance fees. Which have grown now to just shy of $60million (that is 60 million of profits reported to the market over the last few years, never collected)

However then they issued a downgrade (16 April) to $20mil to 25Mil siting inability to setup new funds due to Glaucus (without even giving any feedback on the idea that they really intended to make $12 mil profit with 2.5 months to go in the financial period when their half year report issued in Feb stated that they only made $10mil in the first half, but hey Glaucus is a great excuse so why not use it). So essentially they advised that they would have a similar half to the last half.

Then a few weeks later (7 May) they completely withdraw the forecast. Noting among other things that management fees are less than the operating costs of the business. So at this stage they have acknowledged they are not making $20mil this year.

Then a week later (15 May) they provide a new update on the valuations and a provision for a 7mil write down on the non-current assets of performance fees on the books and asset adjustments. But the really interesting kicker here is that this impact was not known when they issued the notice of 7 May that they were withdrawing the forecast. hmmmm... So by that metric the profit should be at this stage circa $13mil or less...

Now some other interesting points. They have only reviewed 12 of their funds so far of 93 apparently (so 12% have been independently valued) and there are apparently 16 valuations still to go, which will include down valuations, depending on the logic, they could be worst or they picked the worst and the rest will not be as bad - who knows... Now one point that hasn't been factored in yet is that the valuation of BAF on the financials (as BLA hold a stake in BAF) this won't be calculated until 30 June and given it has fallen 30% there are more write downs coming. This is why the cynics are saying that the buy back smells a little, because a cynic would suggest that they are buying back the shares to increase the unit price to avoid as much of a write down in the carrying value of the asset as possible. Now if memory serves, because I cannot find the numbers, BLA invested something like $10mil into BAF when it first floated. Those units got up to circa $1.10 around December (from a $1 issue), So if that investment has to be written down by 30%, that could be another $3mil write down - all speculation, but who knows. The model is so opaque anything could be happening there.

Now the really big issue that dominated the investor updates and the telephone calls and specifically any meeting you have with the management is the effect of the new accounting standards that are being introduced. Which by a basic assessment of the profit & loss and balance sheet, would have shown a loss of $1mil for the first half of the year (because the 11.5mil in performance fees (the non-current assets) would not have been allowed to be recorded), and given that the 2nd half is apparently going to be worse, these guys could be showing a significant loss for 2017/18, limited cash in the bank and an organization gutted of staff.

So answer yourself this question, what value do you put on a company with a tarnished reputation, just lost $5mil in a year under the new accounting standards, is the subject of a class action from disgruntled shareholders and needs to complete a capital raise to seed new funds...

The turning point for this company will be when the board announces that there was a culture of inflating assets on paper and they have put a stop to it. Until such time as they acknowledge the issue with the old business model, nobody of substance will trust them.