LUM 0.00% 2.3¢ lumacom limited

comments about jv

  1. 1,645 Posts.
    Thank you to the_stockwatcher from oze for this post.

    I read that announcement before buying LUM and it didn't bother me at all. I'm not a member of Hotcopper so I don't know exactly what they're saying, but the way it will work is:

    - all revenues go into a joint-owned pool
    - 15% of these revenues go to LUM (note this is REVENUES - before netting off expenses)
    - LUM will ALSO receive 30% of the profit the jointly-owned company makes (ie. revenues minus expenses including tax)

    These figures assume that Totius would take up the option of 70% ownership by paying an extra US$1.75m.

    As pointed out by Jjp, Totius will be doing all the hard yards, and the breadth of the markets they are targeting are mentioned in the annual report. So, 15% of what could be massive revenues, plus 30% of very substantial profits will almost all flow to the LUM bottom line. Maybe the amounts Totius are paying to acquire up to 70% of the joint venture seem small, but considering what they're providing to LUM it looks like a good deal to me.

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