ANITE TO ROCKET ON RESULTS

To get an impresion of the importance of this point which is buried away in the Financial Report.

Employees are granted options to acquire shares at their market value at the date the option is granted. The options may be exercised, and shares acquired, between three and ten years after their grant.

Its such a shame that options are considered a popular way of adding to shareholder value - on the face of it it seems great - Employees and management have a right to buy shares at x price. What wrong with that?

If the company has grown - the shareprice is 2x and employees exercise thier options then more shares enter the market - reducing the value of each share. It's just like printing money. Okay - a few 1000 options with a strike price of x ain't going to do much to 192m shares. You may keep key people and thus add shareholder value - But when you grant an option you really giving shareholders money away at the excise time. Money doesn't come from nothing. In this case it comes from existing shareholders.

The problem is there is no limit on the amount of options. If a large amount of options are granted - The existing market cap for instance - then at some point in the future (exercise time) a shareholder's shares will certainly be worth substatially less as you have paid the employee's share option. It creates a limit on the worth of the company. If you are paying a p/e of 26 for a growth company in line with its earnings then you have bought into a growth company which has a absolute guarnteed limit on its shareprice growth. Whats the point in that?