ALLIED BRANDS (ABQ) SIX MONTH RESULTS PRESS RELEASE MORE EXAGGERATIONS AND CORPORATE SLIGHT-OF-HAND

Allied Brands Ltd (ABQ) announced their six monthly hype campaign with press releases and public interviews that misstate completely the horror contained in the actual numbers.

SIX MONTHLY REPORT

The key facts as advised today by a share broker at the Gold Coast who follows the Allied Brands Circus are as follows -

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2008 Profit per Share - .016/share

2009 Profit per Share - .011/share

A MASSIVE 50% DECLINE IN PROFIT PER SHARE!

The Awesome Water/Plasma TV brand is collapsing as water shortages end, and founder Anthony Underwood has left in disgust. Allied profit on bad debts in this high-risk venture with overpriced plasma TV's could easily wipe out the total group's profit by the end of the year and leave the company with a warehouse full of unsaleable junk.

Baskin Robbins store on store growth, said to be 12%, is actually in decline after 20% price increases required by Allied Brands. This has likely been a direct result of the sacking of the marketing department at the start of the summer season, as well as the product shortages across the system, product shortages that the company has never disclosed to the market but are obvious to people like me who visit our local shop regularly.

Cookie Man is also finding declining product interest as Allied is now in direct competition with many Cookie Man locations with their other brands.

Note Allied Brands is claiming they are going to "segment report" and then they fail to provide key metrics for the brands, just more hyperbole like "grown significantly" and "improved sales". This is typical Allied Brands furphy reporting and it offers no improvement when hype is done brand by brand.

The company claims they can "resurrect" dormant brands. They fail to acknowledge however how competing against their existing brands with new brand names does anything but increase fixed costs. These fixed costs which have impacted all the brands have seen shop lease costs skyrocket as leases come due, with this factor likely to see an acceleration of closed franchise operations and greatly reduced margins on company-owned sites.

Note also the runway costs that the company has been unable to control:

Employee costs - up 50%

Borrowing costs - up 45%

Administration costs - up 265%

and the most shocking factor:

Cash on Hand - down 42%

The company continues to subsist on cash injections from outsiders now the main source being Venture Capital Springtree USA. Without this cash, during the upcoming slow season Allied will be out of cash.

No one here is recommending ABQ to any client.

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Quite a conflict with the rosy scenario signed off by Lachlan McIntosh!