Gladstone about to Breakout?

isis - from reading last years accounts and a the mention under CEO report - Historic issues you will note that the expenses relating to the past were within the 2002 accounts and only the cash position has changed because they paid for these accruals in 2003. So no affect on 2003.

You will note that the only exceptionals reported in the 2003 accounts are the annual amortisation of goodwill.

The fact remains we need to see real sales growth otherwise the share price will struggle to move up, especially if the sales drop is a continuing trend.

I am also very aware of the directors change over, I first bought in when the company chnaged from (Versalite) cash shell into Gladstone and did well when they reached the ridiculous levels. I bought in again earlier this year (a few hundred thou) at circa 4p and topped up again at 11.5p.

I do find it hard to remain as optimistic as I have been when sales drop and profit is massaged by reduction in current directors bonus you will note in the Options Announcement:- in the last 2 years, during the successful turnaround of the company, Mr Merrett has not received any Salary increases or bonus payments and has not requested a salary increase for the current year from the Remuneration Committee.

I would not be surprised if a further issue of shares takes place in Feb/Mar with the reorganisation of the share capital and therfore a further dilution.

So are they fair value, well as at 31 August 2003 earnings were 0.45p per share with 41,116,966 shares in issue, if recalulated to account for the new shares and options the earnings drop to 0.394p per share. P/E therefore 30 but if the two main directors had paid themselves salary rather than grant options which dilute then the P/E would have been a lot lower.

We need to see real growth in field sales or by acquisition for the share price to rise on good value.

I would say I have gone from buy to hold and await positive news in January if it is not then I will sell.