Forum Archive Index - April 2000

[ril <ril99_99@yahoo.co.uk>]

By FYE 2002 the asset backing per share at 7.2 cps. This still
represents a healthy quadruple what the promoters paid for their stock
(2 cps). Assuming projections met. If 30% growth not sustained then
different.

The prospectus didn't reveal cost of sales but lumps everything under
Other Operating Expenses. Thus we do not know the profit margins or how
much is paid in wages etc. This is a poor way of conveying financial
information but could be justified by commercial sensitivity.

There is no information on her management contract.

Gordon King hit the nail on the head with his previous post on supply.
Is BD able to undercut existing retail outlets? If not and I'm sure
there would be protest from the stores doesn't freight make the products
more expensive.

Item 10.2: It is intended to stock all major brands. Notice the wording:
intended. Nice little out. Oh, sorry but 67% of the product suppliers
won't play Estee et al.

Item 10.2: The market size is unlimited. Freight is the problem. For
instance vitamins cost 1/3 of what they do in NZ. But the freight kills
it. 

Item 12.7 Risk: BD having difficulties obtaining adequate products, or
difficulties with suppliers of products. Did the directors know on
prospectus date that 2/3rds of the industry would not supply? This is of
course an unacceptable risk. No explanation of supply contracts.

Item 20.0. The size of the issue fees is unusually large. Why?

Had the directors paid 2 cps say 2 years ago, I might not be concerned.
But paying 8% of the issue price not long before listing is a little
rough. The business is after all an unproven idea. The directors have no
real downside here. The burn rate for the funds is not as high as some
net companies but what if a big player enters the market? IS there
loyalty on the net? If there had been exclusive e-com agreements with
suppliers for Australasia then it might have been different.

Item 10.2 Australian spend 1.2 bn. With 1/3 of suppliers = 400 million.
Add NZ and you have 500 million. Projected revenue 3.5 mn FYE 2002. Thus
need to capture 0.7% of total spend in market. Is this realistic?
Opening warehousing in Aus to keep freight down?

If there is move to net why would cosmetic companies not use their own
sites. Restrict pricing around vendor requirements so as not to offend
and keep total control? This would be the way it will end up. At moment
cosmetic companies unsure of potential for their products of the net. So
currently some offloading through BD as test is my guess.

The key to all this is what that fulla Gordon King picked last month:
supply, supply, supply and three days after listing it is all about to
fall apart.

Where is investors protection? In supply of course.

Well done Gordon K.

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