I repeat. Full year 2015 SGH PBT =A$119. I assume they will continue to earn the same from the pre QPP purchase business.
QPP( now WTG) guided shareholders that to June 2017 net proceeds for HL claims would be £20M ( C.A$40)
SGH paid zero for HL claims cases and therefore will also garner A$40M to June 2017. [They did NOT pay too much for that...steal of the century!]
SGH, after own diligence and valuation method, paid 6.3 X PAT for the core QPP PSD business
Since competitor Aim listed Redde plc is currently valued at 22 X PAT by the market, SGH paid one third of the amount each £1 of profit Redde is valued at by the market. That suggests SGH paid buttons ( 1/3rd of full price) for the cases purchased.
In my view SGH will have to throw A$100-120M at the working capital to get to cash generation stage. I as a QPP shareholder knew that, I was not a happy bunny at the steal price , and was pretty sure the shorts brigade would be all over SGH during the cash negative stage. One the shorts have got their teeth into a situation like this they will probably try to work it up and down until the weakness is clearly passed. I reckon 2017 will be very good fro SGH shareholders. Could be a lot sooner but certainly SGH has the feel of a company which will not give up on its 10% divy growth plan easily. Even if the recovery takes until 2017 the yield is great.
Mel ( still looking for Joubert with a rope)
SGH Price at posting:
86.0¢ Sentiment: Hold Disclosure: Not Held
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