Strait Brands - Financial Overview

The key financial considerations on which the original concept of The Tamar Distillery, now Strait Brands, were based are simple:

Relatively low investment, creating potentially lucrative, and consistently improving returns.

All the members of the management team have engaged in self-employed businesses and understand the requirements of sound financial and cash flow management.

The strides management has made in consistently adding value to the overall proposition has produced a business currently valued at $( )m. It is believed this will grow further with the addition of the Doran’s Fine Foods and Red Kelly’s Gourmet Foods businesses.

The current valuation is partially based on the perceived asset value of the Strait trademark and the incalculable marketing contribution the Vozdka contract delivers in the Australian and international marketplace.

But it is also based on what can be termed a conservative and conservatively optimistic financial model, the integrity and methodology of which has been independently verified.

Financial projections have been purposely conservative since the management team has sufficient experience and expertise to recognise the importance of realistic and credible forecasts.

This pragmatic model includes achievable targets, calculated by simple formulas.

In mainland Australia, sales projections are based on sales of two bottles of Strait Vodka per week in 100 outlets, 52 weeks of the year, in five states.

Through existing contacts in the United Kingdom, Strait Brands is confident it would be able to pre-sell into two specific branded bar chains, at least one container. One of these chains is the Walkabout Australian bars owned by Regent Inns, which has said it will expand from 70 to 140 outlets nationally over the next 18 months.

Strait Brands believes it can further maximise returns on its acquisitions by developing new markets, honing a collective sales and marketing effort and ultilising the skills of the newly combined workforce, especially senior management.

Strait Brands Pty. Ltd. - Executive Summary of Financial Forecasts

Strait Brands has determined its capital requirement and the outcomes from the investment of those funds.

Assumptions

1. The signed trading agreement with Vozdka Pty. Ltd. goes ahead as planned.

2. The Russian agreement will generate sufficient public relations and media exposure to generate a high impact, guerrilla marketing launch into domestic and international markets.

3. Sales are realistic and based, where possible, on known outlets.

4. The Russian equipment and vodka recipes will produce a superior range of vodkas.

Forecasts

Were prepared on a conservative and an optimistic basis.

More focus has been placed on the detail of the vodka business because of the size of its potential.